Oak Park's Urgency: Reining in Excessive Taxation

Opinion: Columns

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By Bridgett Baron

Village of Oak Park Trustee candidate

The race for three open seats on the Oak Park Village Board is crowded with 11 candidates. If you've been listening to the campaign dialogue so far, you may think choosing the ones for you is about determining which ones align most closely with your level of progressivism.

I share my fellow candidates' progressive values. However, as a practical matter, I also recognize that — more than any other issue — reining in excessive taxation is the foremost concern for me and fellow Oak Parkers, property owners and renters alike.

Fortunately, it also happens to be something that, if elected, I would have much more influence over than any noble-sounding notion that has little, if anything, to do with actual village governance. Oak Park has a bad habit of throwing money at issues — think the Divvy bike-sharing debacle, or the Downtown Oak Park valet parking service to the tune of hundreds of thousands of dollars — that have little to no impact.

The accompanying chart shows three data trends between 2005 and 2018: Oak Park's overall levy increase among all six taxing bodies and Tax Increment Financing districts, inflation, and average single-family home sale prices.

Over that span, total levies (reflecting the trends of an average tax bill) have gone up 68 percent, or well above twice the rate of inflation. Meantime, the average single-family home sale price has appreciated by less than 3 percent. A prime reason: Buyers must allocate a larger proportion of their total monthly housing "nut" to real estate taxes, thereby dampening property values.

I am surely not alone in knowing of numerous anecdotal stories that reflect the fallout from these trends. Countless Oak Parkers have decided, or are coming to the decision, that they need to sell their home because their real estate tax bill has made homeownership in our community unaffordable. Regrettably, if these sellers purchased their home after 2005, they often find that they are unable to sell their home for as much as their purchase price, when doing so seemed like such a sound investment.

Two foundational roles of municipal government are to protect and strengthen the value of property, and to stabilize property taxes. Unfortunately, Oak Park has experienced the very opposite: a one-two punch of stagnant property values coupled with rapidly rising taxes.

Through early voting that begins on March 18 and culminating on Election Day on April 2, there are three open seats that Oak Parkers will fill on the village board.

If you share my concern about burdensome taxation causing property values to suffer, I ask for your support and your vote. If you desire village board members who will be diligent in advocating for policies that maximize equity for all Oak Park residents with a level-headed view of their potential impact on property values, I ask for your support and your vote. And if you seek fresh voices on the village board that are balanced, fact-driven and independent, I ask for your support and your vote.

For more information on Bridgett's candidacy, visit BridgettBaron.com.

Reader Comments

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Bruce Kline  

Posted: February 21st, 2019 2:57 PM

I agree with you Jason. The problem in Oak Park (as well as other localities) is that everyone has their favorite issue that must be protected from any spending cuts. God forbid if one proposes a spending cut on said issue. Look at "equity." The remedy no doubt will involve large increases in spending ... not less. So you are absolutely correct. And that is why the problem that every candidate talks about - our unsustainable tax burden - is largely in my view refractory to any meaningful or purposeful remedy.

Jason Cohen  

Posted: February 21st, 2019 2:40 PM

@Ramona, that's it exactly. I don't care what side of the aisle you are on as most politicians these days seem to be big on vague promises and small on actual action. I know it's not always easy but I want to see substance over style. Explain what you will actually do to fix these problems. Then we know what to expect and can really decide who we want to vote for.

Ramona Lopez  

Posted: February 21st, 2019 10:15 AM

Jason...Correct you are. It doesn't take much to identify a problem. To enact a solution; well now that's a heavy lift most elected officials aren't capable of.

Nick Polido  

Posted: February 21st, 2019 10:03 AM

Owning a home in Oak Park is not an investment, a better classification would be a use asset. This asset is akin to basically renting. I purchased my home in 1998 for $289,000 added room to kitchen $125,000, basement $24,000 and new garage $35,000. Total basis $473,000. According zillow and other sites my market value is $469,000. Over these years we built New Middle schools, huge Library, new public work building with grass on it's roof not to mention the many public parks renovations pools etc. Oak Parks schools I believe used to rate as one of the best in the state, this is no longer true.

Neal Buer from Oak Park  

Posted: February 21st, 2019 8:39 AM

The biggest problem is funding the pension deficit, which, I believe, is around $10 million a year.

Tom Clarkson  

Posted: February 21st, 2019 8:19 AM

Jason Cohen, I agree that declaring taxes are too high is easy and will be a common thread among candidates. Most people say that but what we see around town are proposals to solve equity issues by throwing money at them as Ms Baron indicates in her article. Probably most yard signs will have 'fiscal responsibility' as a third bullet point because everyone knows it's a concern. I don't know Ms Baron at all but to her credit her article indicates that we need further strong effort on progressive issues but not at the expense of contributing to the tax crisis. The biggest strides we can make in regards to equity and other progressive ideas are cerebral in nature. Judging by this article, the tax issue is actually the first bullet point on her yard sign so to speak. I think she has differentiated herself and she gets it. Budget cuts are necessary and are harder to spell out, but let's start with the low hanging fruit (reckless spending).

Jason Cohen  

Posted: February 21st, 2019 5:08 AM

It's not exactly new info that property taxes are a big concern in OP. The numbers are nice but I don't see a single mention of how this will be remedied. It's very easy to say this is a problem that should be addressed but what would be helpful is some mention of what actually should be done about it. That's what matters. People always love candidates high level pledges before they get elected and then when plans start to take shape public opinion can change quickly. Explain exactly what cuts will need to be made and how specifically the property tax burden will be addressed. That's the info that really matters. The problem statement is well known. Tell us exactly how you will fix it,

Bruce Kline  

Posted: February 20th, 2019 11:52 PM

Yes Mr. Rothstein one has to wonder if Harvey's stratospheric effective tax rate is one factor contributing to it's continued devastation and population egress.

Tom Clarkson from Oak Park  

Posted: February 20th, 2019 11:41 PM

Jason, I'm aware there are poverty stricken towns like Harvey that have higher rates because the homes sell for $20k. If you re-read my comment you'll see I ask for 'similar' which i would define as having a decent crop of homes that sell around $400k and has a median household income somewhere in our ballpark. There are many towns like ours near major urban areas and I have looked at a lot of them and their property tax rates and I stand by my observation that I have not found one with a higher rate than Oak Park. My quick check is to look up on a realtor site at homes that are for sale between say $350k to $500 and use the previous year's tax bill. Seriously, I would bet that you will not find a town Jason and that is pretty scary. If anyone thinks I'm being dramatic please come up with a town.

Jason Rothstein  

Posted: February 20th, 2019 10:14 PM

Tom: We are high, to be sure. But there are higher effective tax rates lots of other places, including here in Illinois. At 6.9%, Harvey's effective tax rate is basically double Oak Park's. Mr. Kline: Yes, you are right. I was suffering from some historical blindness. In today's climate of relatively high appreciation and relatively low interest rates, taxes will eventually outpace mortgage payments. But that's not universally true (except in the sense that eventually a mortgage is paid off, but of course, that's not what I meant). On the other hand, would I rather be buying now, facing a 3.4% effective tax rate, or 30 years ago, facing a 10-12% rate on my loan? Probably the former.

Kitty Conklin  

Posted: February 20th, 2019 9:06 PM

I absolutely share your concern about burdensome taxation causing property values to suffer. As importantly, burdensome taxation is causing a major downward shift in affordability of housing in OP - period. I have had friends move away, friends who simply do not have confidence in the governing practices of all the taxing bodies. Thank you, Bridgett, for running for the VOP board! You have my household's support!

Bruce Kline  

Posted: February 20th, 2019 6:01 PM

No Mr. Rothstein it is not true that everyone's property taxes eventually will exceed one's mortgage. All you have to do is look to California where Proposition #13 is still the law of the land. Even Chicago Mayoral candidate Bill Daley is talking about a "property tax freeze." (Not that I take him seriously)., The other consideration is historically (to the best of my knowledge) property taxes have always been less than mortgage payments. So this phenomena where mortgage payments are now approaching property taxes are indeed a disturbing brave new world.

Tom Clarkson from Oak Park  

Posted: February 20th, 2019 5:32 PM

Jason, I think your comment below about your preferred metric, the effective tax rate rising 35% since 1999, is exactly the point the graph is making and it is therefore not misleading. Your preferred metric contains a component of inflation in both the numerator (tax dollars changing over time) and the denominator (home prices changing over time) so it should hold relatively constant unless the change in tax expenditures have far outpaced the change in value of our homes. An effective tax rate going up by 35% (your number) is mind blowing and as I explained above it should not be compared to inflation as inflation is implied in both numerator and denominator. I've compared Oak Park's effective tax rate to those around the entire country and I can't find a higher tax rate anywhere (New Jersey, Illinois, etc.). Regardless of your views on government there are dire unintended consequences to having the highest tax rate of them all. If anyone can find a higher tax rate in a similar town please say so...it will make me feel better.

Jason Rothstein from Oak Park  

Posted: February 20th, 2019 5:22 PM

What I meant, and perhaps it wasn't clear, is that it's irrelevant to the question of whether taxes are too high, or whether they are fair. In my example, the guy who paid too much for his house at the top of the market is paying the lowest tax-to-mortgage ratio, but that's not the guy you want to be. To Ramona's point, there are lots of reasons to buy in OP versus Elmhurst or the city, and there are lots of reasons to buy in those places. Taxes might well be one of those factors, but not the only one.

Josh Vanderberg  

Posted: February 20th, 2019 5:14 PM

Mortgage payment is irrelevant? When I sell my house, and somebody sees that they have to pay 75% of the mortgage payment in taxes? Irrelevant?

James Pfluecke from Oak Park  

Posted: February 20th, 2019 5:10 PM

But this is a Village Trustee candidate posting, not D97 or D200---the ability of the Village to truly impact our taxes and pay off past pensions that should have been paid before is very little. The Village faces some hard choices but in the end there is not a ton they can do to impact our taxes. A ton of it is fixed costs. This essay here lists zero methods to lower our taxes or stop the rise in taxes.

Ramona Lopez  

Posted: February 20th, 2019 5:04 PM

Jason, Where it becomes extremely relevant is when one attempts to sell their home. Using your scenario, Why would I buy a $500,000 home in Oak Park and pay $12,000 in property taxes when I can buy a comparable home in Elmhurst or Chicago proper and pay half the taxes? In your scenario, being in Oak Park is adding $500 a month to their monthly mortgage payment. I would rather put $500 a month away into a 401K and reduce my income tax burden, than to hand it over to some gov't bureaucrats who wants to hire 19 equity officers or build a massive pool.

Ken Hayes from Oak Park  

Posted: February 20th, 2019 5:03 PM

There is no way you should have to pay $2000 or more to live in a home you own outright. It's just silly to think that's a sustainable model. The schools were great 15 years ago, but now I would beg to differ.

Jason Rothstein from Oak Park  

Posted: February 20th, 2019 4:44 PM

Josh: I understand the point you are trying to make, but it doesn't address the basic fact that your mortgage reflects your homes market value in the past, and your property taxes reflect the service value today. I don't see how property taxes as a ratio to mortgage payment is a meaningful metric. Consider: Bob, Tom, Joe, and Al all live in four identical houses on four identical lots in the middle of the same block. All of their houses are worth $500,000 today. All are currently taxed at $12,000/year. Bob bought his house in 1978 for $100,000. His mortgage is now paid off, and he pays $1,000/mo in property taxes. Tom bought his house in 2000 for $220,000. His mortgage is $850 and he pays $1,000 in property tax. Joe bought his house in 2005 for $550,000. His mortgage is $2,500 and he pays $1,000 in property taxes. Al bought his house last year for $500,000. His mortgage is $2,200 dollars, and he pays $1,000 per month in taxes. You can argue that they are all overtaxed, or that they are all taxed fairly. But their mortgage payment is irrelevant to the question.

Josh Vanderberg  

Posted: February 20th, 2019 4:39 PM

Sorry, links are: Levy adjusted for wages/inflation: https://bit.ly/2Ni0DDp Levy compared to wages/inflation: https://bit.ly/2EjTzmF

Josh Vanderberg  

Posted: February 20th, 2019 4:18 PM

Jason, please see here: https://github.com/jvanderberg/oakparktaxdata/blob/master/charts/wage%20and%20price%20adjusted.png - since 1999, up over 60% when adjusted for inflation, 50% when adjusted for wages. In absolute terms, 140% increase: https://github.com/jvanderberg/oakparktaxdata/blob/master/charts/wage%20and%20price%20comparisons.png. Put more simply, my property taxes are now about 80% of my mortgage.

Jason Rothstein from Oak Park  

Posted: February 20th, 2019 3:59 PM

And -- sorry, but I can't not point this out: in an appreciating market, over time, everyone's property tax bill will exceed the size of their mortgage. Your mortgage reflects the price you paid for an asset at a fixed point in time in the past. Your property taxes reflect the price you pay for services today, and that price has risen in part due to the factors that drive appreciation of your house. (E.g., OP is a desirable place, more families move in, which increases the cost of the schools, etc., etc.)

Jason Rothstein from Oak Park  

Posted: February 20th, 2019 3:53 PM

Josh, et. al.: Again, I'm not disputing that property taxes are rising too much, too quickly. But this chart is either intentionally dishonest, or interpreted ignorantly, neither of which reflect well on the candidate author of the accompanying op-ed. One more honest approach might be to use the effective tax rate, which is tax burden represented as percentage of full market value. By that metric, Oak Park's taxes are up about 35% since 1999. Still a big jump! But a more honest picture that accounts for how property taxes relate to home value. (I'd also add that at 35%, the jump just about matches inflation, and is actually about half of the average housing appreciation over the same period.) There's an argument to be made that we're overtaxed. It just isn't this argument.

James Pfluecke from Oak Park  

Posted: February 20th, 2019 3:52 PM

Every candidate is running on taxes. I have heard presentations by 6 candidates and watched the SUA forum of all 11 and I did not hear any candidates proposing to raise taxes-they all acknowledge this challenge. I don't see anything in this article that discusses why they have gone up or what the candidate proposes to do about it. She does not give me a reason to value her approach over other candidates whom talk more specifically about the nature of Oak Park's challenges and what their vision for the future looks like.

Josh Vanderberg  

Posted: February 20th, 2019 3:34 PM

I will note that we are approaching a very important limit. Many of us have mortgages, and for more and more of us, our property tax bill is starting to rival the size of our mortgage. How do you sell your place when the new owners will have to pay the equivalent of another mortgage payment in local taxes? It makes it harder for people to get loans, and it makes it lowers the amount they are able to pay.

Josh Vanderberg  

Posted: February 20th, 2019 3:32 PM

Jason, you can take the data back to 1999, and you still find that the levy has increased much faster than the rate of inflation, and much faster than wage increases. I don't care so much about home values, as the way we are taxed I only care if my home increases or decreases in value faster than other homes. Any way you slice it, the current rate of property tax increases are unsustainable.

Bruce Kelly  

Posted: February 20th, 2019 11:20 AM

Doug Katz, look no further than DuPage County for lower taxes, great schools, far less violent crime, less congestion etc.. I moved to Westmont after 54 years in Oak Park and the surrounding area. I kick myself for waiting so long.

Neal Buer from Oak Park  

Posted: February 20th, 2019 4:59 AM

I have a nice home here for the last 40 years. My home has increased 10 times in value, but half of that was money spent on improvements, so let's say my home has gone up 5 times. My taxes have increased 32 times from what they were in 1978. In 1978, my annual taxes were .085 of value. Now taxes are closer to 3% of value. If we stay on the same path, we will approach 5% in 10 years.

Bruce Kline  

Posted: February 19th, 2019 11:08 PM

Mr. Rothstein: when your property taxes approach almost 4% of your market value, yeah those confiscatory rates (some of the highest anywhere) are bad for home values. As far as the schools are concerned, I agree with your argument linking the quality of schools to home values. But in my 35 years in living here I've seen dramatic rises in property taxes, stagnation of home values, and marked decrements (real and perceived) in the quality of our schools. We are in a heap of trouble IMO.

Jason Rothstein  

Posted: February 19th, 2019 10:13 PM

This is an astonishingly dishonest argument, supported by the worst kind of data cherry picking. Yes, people who bought towards the top of the housing bubble have seen only the smallest appreciation versus sales price, but people who bought a few years earlier or a few years later have seen quite good rates of appreciation in Oak Park. Does this mean that the extremely rapid rise of property tax rates isn't a problem? Of course not. But this is an argument that can be made without relying on misleading statistics such as those presented here. I will add, however, that the notion that property tax rates are bad for home values is itself overly simplistic. A big cut to the property tax rates would likely mean a big hit to school quality, and schools are one of the key drivers of sustaining home values in our community.

Miguel H Gonzalez from Oak Park  

Posted: February 19th, 2019 6:53 PM

Too late. Damage done. Real, substantive reform is needed. People are voting with moving trucks not just ballots. The village, greater city and state are losing badly.

Doug Katz from Oak Park  

Posted: February 19th, 2019 6:36 PM

As I look at this graph, I think about the push for affordable housing. This issue makes Oak Park unaffordable for many and drives people out of the village to cut their losses. I, like many, am waiting patiently for the point when I can move to a place where my tax bill won't eclipse my mortgage. My assessed value went up over 35% in one assessment, which is ludicrous on any level and beyond any explaining. It is sad in so many ways as I have found myself to be in majority in this philosophy.

Mindy Setzler Kolodziej  

Posted: February 19th, 2019 5:59 PM

Well said. Your graph reflects the problem with understated simplicity. Now that people are doing their taxes, I wonder how many more will flee Oak Park as only the first $10K paid in property tax is deductible.

Tom MacMillan from Oak Park  

Posted: February 19th, 2019 2:56 PM

You certainly have my vote. The really insideous thing about property taxes is also the impact they have on the selling price of a home and the homeowner's family net worth. That extra $10k a year in property taxes (over and above what it should have been) reduces the value of the home by an amount equal to about $100k in selling price. For many middle class homeowners in this town, that is a reduction in 50% of their family's net worth that simply vanishes because of the growth in property tax that happened while they lived in the home. We need Trustees who are actively at least trying to reduce the carnage.

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