Ask the assessor
Q: My property taxes have skyrocketed in the last few years. How can I be paying so much and the schools need more money?
A: Because of the 2002 reassessment and increases in local spending, the property taxes of many Oak Park residents have increased substantially over the last few years. To understand how these factors influence tax bills, it might be helpful to think of the total amount of money raised through property taxes in Oak Park as a pie, with the tax bill for each property owner representing one small piece of the pie.
A simple example can illustrate the relation of the tax pie and individual pie slices. If your piece of the pie were 1 percent of the tax pie and the tax pie represented $100 in spending, your property tax bill would be $1. But if the tax pie represented $200 in spending, your 1 percent pie slice would result in a $2 tax bill. The bigger the tax pie, the higher your tax bill, even if your percentage stays the same.
Oak Park’s tax pie has been growing at a rate well above the rate of inflation for a number of years. In 2000, all local governments serving Oak Park levied a combined total of $88 million in taxes. In 2005, just five years later, local governments levied a total of $120 million. This represents an increase of about 36 percent, or about 7.2 percent per year.
The size of the total tax pie is not the only determinant of your property tax bill. Individual pie slices typically change in size after a reassessment. Thus if the total tax pie represented $100 in spending but your pie slice increased as a result of a reassessment from 1 percent to 1.5 percent of the total, your tax bill would be $1.50.
When the 2002 reassessment of Oak Park properties hit the bills of local property owners in the fall of 2003, the tax increase for most homeowners was dramatic. This happened largely because the 2002 reassessment shifted Oak Park’s tax burden. The pie slice for most homeowners grew as a result of the reassessment while the pie slice for most owners of apartment buildings and commercial properties shrank. This shift came about because the assessed values of homes grew at a faster rate than the assessed values of apartment buildings and commercial properties.
Schools
When addressing the specific question of why the schools need more money, it is important to look at each school district separately. High school District 200 is not considering a referendum at this time. This is because the voters of Oak Park and River Forest approved a referendum in 2002 that has allowed the high school’s property tax levy to grow by 57 percent over the last five years. In contrast, elementary school District 97, which has not had a referendum on the ballot since 1999, has seen its property tax levy increase by 30 percent during the last five years.
I suspect both school districts would state that the costs of providing their services have exceeded the rate of inflation and that their above-inflation levy increases reflect their efforts to keep pace with rising expenses. Although this is probably true, the difficulty for the community is that the incomes of most Oak Park taxpayers have not increased at the same rate as their tax bills. How to provide the quality schools and services that Oak Park wants without making the community’s taxes prohibitively expensive is one of the most challenging issues facing Oak Park today.
Q: Where do my taxes go? Someone said recently that schools get 80 percent of my tax bill. Is that true?
A: Last year, 65 percent of Oak Park property taxes went to the high school and the elementary school district. Another 2.5 percent of our property taxes went to Triton College.
Q: Is there anything being done to lower residential property tax increases?
A: Yes and no.
Yes, regarding changes in the size of your piece of the tax pie. Starting this fall, many Oak Park homeowners will see substantially larger homeowner exemptions on their tax bills than they have in the past. This expanded homeowner exemption (somewhat inaccurately known as the 7-percent assessment cap) is designed to limit the increase in the size of a homeowner’s piece of the tax pie after a reassessment. As a result of this expanded exemption, the tax increases resulting from the 2005 reassessment of Oak Park properties, which will be mailed in the fall of 2006, should not be as large as those that occurred after the 2002 reassessment.
No, regarding the overall size of the tax pie. I estimate that the total size of the tax pie, which represents spending of all local governments, will grow by about 10 percent this year. In part, this is because the property tax referendum for the Park District that was approved by Oak Park voters last spring will hit local tax bills in the fall of 2006. In addition, the high school will have a 13-percent increase in its levy which will also appear on tax bills this fall. These increases, plus the normal spending increases of the other taxing districts, should raise local spending by about 10 percent.
Q: My assessment went up by 38 percent last year. Does that mean my tax bill will be 38 percent higher?
A: No. Simply put, your tax bill is your assessed value multiplied by the tax rate. When assessed values increase upon reassessment, tax rates drop. Thus, the falling tax rate will partially offset the 38-percent increase in your assessed value, resulting in a tax increase of less than 38 percent.
Still confused? Think of the problem in another way: The combined increase for all Oak Park assessed values upon the 2005 reassessment was about 38 percent. If the tax rate did not fall after the reassessment, local governments would receive 38 percent more money. But local government spending is expected to increase by only about 10 percent. A 10-percent increase in revenue with a 38-percent increase in assessed values is possible only if the tax rate falls.
At the present moment, it is difficult to determine the exact amount by which an individual tax bill will increase, as it is still uncertain how large each property’s slice of the tax pie will be. I am confident, however, that your tax bill will increase by a smaller percentage than the increase in your assessment.
Q: What can I do to lower my tax bill?
A: If you are eligible for the homeowner exemption or any of the senior citizen exemptions, be sure you receive them. Application forms or automatic renewal letters were mailed out recently. If you have questions about whether you are registered for an exemption or if you want to apply for one, you can call the Oak Park Township Assessor’s office at 383-8005.
You can also file an assessment appeal. For most homeowners, it is too late to appeal the assessment for the 2005 property taxes that will be paid this fall, but the Cook County Assessor will be accepting tax appeals for the 2006 taxes (paid in 2007) until April 17. You can call the Township Assessor’s office for information about appeals and for help filing one.
These suggestions could reduce the size of your piece of Oak Park’s tax pie. If you want to influence the overall size of the tax pie you will have to get involved in government and politics and attempt to influence the state and local government officials who determine spending and tax policy.