The recently mailed second installment property tax bills reflect modest annual changes compared to last year’s bills, with business taxes increasing by 2.5% and most residential properties experiencing smaller tax increases or even slight declines. These changes are primarily due to a tax levy increase of 1.4% from the taxing districts that serve Oak Park.
This year’s 1.4% levy increase was heavily influenced by Illinois’ Tax Cap Law, which is designed to match revenue growth with increases in the cost of government operations and taxpayers’ ability to pay. This is done by limiting most tax levy increases to the rate of inflation.
Since inflation in the United States has recently reached the highest levels in 40 years, one might wonder how the Tax Cap Law limited local spending increases to just 1.4% this year. The reason for this is that we pay property taxes in arrears. So even though this is calendar year 2022, we are paying 2021 taxes. And under the Tax Cap Law, 2021 tax increases are based on inflation for the one-year period that ended in December of 2020.
In 2020, inflation was low as the economy struggled with the effects of the pandemic. In 2021, however, the economy started to expand and for a number of reasons, inflation spiked. For the one-year period that ended in December of 2021, the rate of inflation was 7.0%. Taxpayers should be aware that under the Tax Cap Law, 2021’s higher rate of inflation will influence the calculation of 2022 property taxes that will be paid in calendar year 2023.
If inflation was 7% in 2021, does that mean property taxes will increase by 7% next year?
Not necessarily. The Tax Cap Law allows most taxing districts to increase their levies by the rate of inflation, but only up to a maximum of 5%. Thus despite an inflation rate of 7%, most taxing districts will be limited to 5% levy increases. Exceptions to the Tax Cap Law, however, may result in additional increases that cannot be predicted at this time. Notwithstanding this uncertainty, it is clear that next year’s tax increases will be noticeably higher than this year’s.
Let’s get back to this year’s taxes. Did any taxpayers have above average tax increases? Most people receiving the Senior Freeze, an exemption that provides significant savings for low- to moderate-income senior citizens, experienced tax increases of about 10%. This increase is due to the complicated relationship between the Senior Freeze and property tax rates, which can lead to tax increases for qualifying seniors in some years and tax reductions in other years.
Can I do anything to reduce my current tax bill? If you are eligible for a homeowner, senior citizen, or disability exemption but did not receive one, the Township Assessor’s Office can assist you in obtaining a revised bill for a smaller amount. If you received all exemptions for which you are eligible, however, you likely will not be able to reduce your current tax bill.
Can I do anything to reduce next year’s tax bills?
Oak Park taxpayers can file appeals with the Cook County Board of Review through Dec. 20, 2022. If successful, those appeals will impact the taxes due on next year’s second installment bills. Residents may call Oak Park Township at 708-383-8005 to get help in preparing appeals.
Why were second installment tax bills issued so late this year?
Cook County’s second installment tax bills are supposed to be paid by Aug. 1 each year, and the county met this due date for most of the last decade. But this year’s Dec. 30 due date has set a dubious record — the latest-ever due date for second installment tax bills in Cook County. The reason for this relates to the county tax appeal system.
Second installment property tax bills cannot be issued until all Cook County tax appeals are decided, first by the Cook County Assessor’s Office, and then by the Cook County Board of Review. This year, a computer modernization project created compatibility problems between these agencies that led to a months-long delay in getting correct data from one agency to the other. As a result, the mailing of second installment property tax bills was delayed.
Do I have to pay another tax bill by March 1?
Probably not. During the legislative session that ended on Dec. 1, 2022, the Illinois legislature passed a bill for Cook County that changed the due date for the upcoming first installment tax bills from March 1, 2023, to April 1, 2023. The bill, endorsed by the Cook County Township Assessors Association and other county and local government entities, won overwhelming support in the legislature. As of the writing of this article, the governor has not yet signed the bill, but he is expected to do so.