Reducing the Impact of the Chicago Property Tax Death Spiral
You’ve probably seen the legion of articles on how the population is declining in Chicago, Cook County, the entire Chicagoland area, and the entire state of Illinois. One of the top reasons given for the mass exodus: increasing property taxes.
While a decreasing population means that every remaining homeowner’s property tax burden is likely to increase further, there is a way to mitigate this risk without having to move.
The US Census Bureau has reported the following:
- Chicago: the population dropped by 6,263 in 2015 and a total of 200,000 between 1950 and 2010 (there was an increase of 82 people in 2014)
- Cook County: the population dropped by 10,488 in 2015, the first decline since 2007
- Illinois: the population dropped by 7,391 people in 2014 and 22,194 in 2015
The Chicago Property Tax Death Spiral
Chicago’s underfunded pension obligation stands at $26.8 billion and is one of the biggest reasons for the hole in the budget for both Chicago and Cook County. Increasing property taxes is one of the only ways Chicago and Cook County can pay for them, hence Rahm Emanuel’s recent $588 million property tax hike.
Emanuel has promised $170 million in additional property tax increases for teacher pensions.
Further tax increases will likely be needed to address the shortfalls in the municipal employees and laborers pensions which were to be addressed by pension reform legislation but that legislation was struck down by the Illinois Supreme Court.
Since property taxes have been one of the leading reasons people have left in the first place, it’s probably safe to assume that further property tax increases will further increase the exodus.
Since government spending isn’t declining, this almost guarantees further property tax increases as fewer homeowners will have to share the increasing burden. Some fear that this could lead to Chicago becoming the next Detroit.
The Kicker: many of these pensions are paid to those now living in Florida and Arizona, which hurts our local businesses, reduces sales tax revenues and puts even more pressure on the government to raise property taxes.
Reducing the Impact of Property Tax Increases
Unless you want to give up and move like so many before, the only other way to counteract the impact of increasing property taxes is to appeal them – twice per year, every year at the Cook County Assessor and at the Board of Review. Using an experienced, third-party service like Kensington Research is the best way to get a maximum reduction and not leave any money on the table.
With our 20 years of experience and 90%+ success rate, we’ve saved over 10,000 homeowners across all Cook County townships between $2,700 and $46,000 over three years (the triennial period) with our residential property tax appeal service. If you own a business or commercial property, we also conduct commercial property tax appeals.