If chicago property tax doubles, affect on suburbs? (Schaumburg, Vernon Hills: credit, schools)

[Ann_Chicago]

Oakparkdude, thanks for answering my city of chicago/cook county question. I appreciate it!

[chet everett]

Originally Posted by Ann_Chicago

Just curious, how do you find out how your property tax funds are allocated? We are planning to move from the city to the suburbs and would like to be better informed. Also, does all of Cook County be bare the tax burden of the city of Chicago, or just properties with a Chicago address, or does all of the state since Chicago is such a driving force? In other words, if staying in Illinois and focused on property taxes alone, do you think would it make sense to look for a home outside of Cook County?

The simplest part of your question is actually is about the burden of Cook Co taxes -- in a nut shell every property inside Cook Co carries that burden. Folks in Chicago arguably are more directly responsible for some of the more expensive governmental needs of Cook Co, like the courts and jail. That said there are lots of Cook Co Sheriff's deputies providing law enforcement for more fringe areas and the majority of Cook Co. forest Preserves are not real conveneient to Chicago...

The bigger question of DuPage Co vs Cook Co often comes down to how efficient the overall structure of each is as a well which county has greater demand for services -- most analysis will support the idea DuPage Co does not place as heavy a burden as Cook Co. Upon home owners. One glaring exception to this tends to be portions of Chicago that underassessed -- many folks do get a relative bargain inside Chicago where the mayor(s) have been holding property taxes for both schools and city services artifially low for an extended period (and to make up for that gap in funding the state legislators in Springpatch have largely funneled excessive "aid" to Chicago both for semi-legitmate needs like underprepared students as well as more questionable things like all the "improvements" to roadways and such...

The more complicated issue of which towns have the smallest overall tax burden with the nicest schools / most desirable homes often comes down to which towns have the most favorable mix of high value retail and office developments -- there are folks living in nice homes in Oak Brook worth about $600k paying property taxes of less than 1%, conversely there are folks in older suburbs in Cook Co without much retail / office space paying 3x++ that rate... Of course if the selling price / market value is significantly less the out of pocket may be enterirely tolerable.


In short it makes a WHOLE LOT OF SENSE to get all the details on EACh home / town you may be considering and lay out the total cost not just to acquire the home but the ongoing taxes. You of course need to weigh the whole outlay against things like quality of schools, general level of amenities and potential for future price stability / appreciation...

Both the Cook Co and DuPage Co (as well similar offices in Lake Co and Will Co) can supply a history of tax bills which do list all the amounts paid to schools / park districts / mosquito abatement / water reclamation etc for any PROPERTY identifiaction number...

[Ann_Chicago]

Yes, I'm currently trying to figure out if it makes sense to pay more for a house with a lesser tax bill, or less for a house with a higher tax bill. My hunch is we'll have to decide this on a case by case basis factoring in all other things...Meanwhile I'll keep hoping to find a lower cost house we like with lower taxes in a great school district, that's relatively easy to get to work from! Thank you for the input. I really appreciate it!

[fortwaynebandit]

(Former Chicago resident: 611st and Narragansett)

Most suburbs (especially the collar suburbs,excluding Evanston,Oak Park and Niles) are already on the ropes so if they also raise taxes to compete with Chicago, they risk losing homeowners to the distant suburbs and exburbs of the Chicagoland area.Many are eventually going to have to consolidate with one another or with Chicago itself as they aren't going to be able to pay the staggering medical and pension obligation that are coming,

It's doubtful that Chicago would double property tax as that would simply leave it with fewer taxpayers as more people either become apartment dwellers or leave the city. Taxes will rise, but only in reasonable increments.

[Lookout Kid]

Originally Posted by Ann_Chicago

Yes, I'm currently trying to figure out if it makes sense to pay more for a house with a lesser tax bill, or less for a house with a higher tax bill.

One thing to consider is that mortgage interest is tax deductible, but not the principle portion of the monthly payment. So a mortgage payment has a tax deduction that decreases over time. However, ALL of your property tax bill is tax deductible, and that will stay constant or increase over time.

High property taxes do keep home values lower, since they take up a larger portion of the total home budget. Smart home buyers will adjust their budgets relative to the tax payments if they are cross-shopping suburbs with different tax rates. So, for instance, we had a smaller home budget in Oak Park (which has high property taxes) than we did in Downers Grove (which has low property taxes).

[chet everett]

As a "yardstick" for home shoppers I often suggest folks use 2% as a kind of "benchmark" of tax burden. Homes that have no special exemptions beyond regular homeowner levy (such a low income seniors) and are paying at or below 2% of market value generally represent a "good value" when it comes to taxes. Conversely homes above this mark may be "over burdened"' especially if these numbers are consistent with the amounts being paid by neighbors in the same town with homes that are in similar condition...

Things are a little tricky when you try to look at areas with a wide range of conditions -- assessor's tend to "jump up" values more quickly as propety changes hands as well as following extensive renovation / updating. The benchmark is still a good starting point but you can't expect to prevail in a propety tax appeal if you are foolish enough to be buying the nicest home in an area. I have seen folks win appeals when the facts are flat out wrong -- incorrect count of bedrocks , baths , wrong garage type, etc. You can try and argue that you don't deserve a bigger tax bill becuase your kitchen is all sparking and you have "spa like" master bath but that rarely works...

When it comes right down to it, the kinds or folks that do flock to towns with uniformly high propety values and a healthier mix of land uses are driven by the fact that they do work hard for their money and they are not keen to throw it away on things that do not reflect what they value...

[Ann_Chicago]

Thanks for the reminder that property taxes are tax deductible, and for the 2% yardstick tip! very helpful. We bought our current property at the height of the market in the fall of 2006 and have carried the feeling of being big dummies in real estate since then. Trying to do everything we can to not be stupid again...a totally different real estate shopping experience than in 2006. We're analyzing as many ways as we can think of and trying not to be emotional, but it is hard when it's going to be the place you live and raise your kids in. With Illinois facing the grave budget issues it is, I've been daydreaming about escaping to another state entirely but that's a whole other topic to ponder. Thanks again-

[Lookout Kid]

I'm currently paying about 2.2 percent of home value in taxes in Glen Ellyn, and the natives are getting restless after a couple of levy increases by the local school boards. But we like it here anyway.

It could be worse. We could be in Jersey or Connecticut.

[J. Lundegaard]

Originally Posted by chet everett

LK is of course correct -- I am often shocked at just how few people are truly aware of what happens to their local property taxes.

Embarrasingly, I am one of those people who is pretty ignorant as to property taxes. Then again, I do not own, but rent, so maybe I deserve a pass.

Can you or anyone else give me a very basic tutorial on property taxes? I understand they go to fund public schools, but it sounds like they also fund the teachers' pensions.

And what is the major difference between how Chicago uses its property taxes versus a suburb (like, say, La Grange for example)?

[Lookout Kid]

Originally Posted by J. Lundegaard

Can you or anyone else give me a very basic tutorial on property taxes?

Well for example, here is where a typical Glen Ellyn resident's property taxes went in 2010 in my elementary district (found on the Village web site):

45.7% Grade School District #41 (K-8)
28.1% High School District #87 (9-12)
6.7% Village of Glen Ellyn
5.3% Glen Ellyn Park District
4.2% Glen Ellyn Public Library
3.6% College of DuPage #502
2.6% DuPage County
2.0% DuPage Forest Preserve
1.5% Milton Township
0.2% DuPage Airport Authority
0.1% Glen Ellyn Mosquito District

The K-12 schools are a whopping 73.8% of my bill, with village services taking the next largest chunk. I don't mind paying for these things, but most of the school budget is personnel costs.

I wouldn't mind seeing them eliminate the Milton Township government and the Airport Authority, but at the end of the day that's only 1.7% of my bill.

If you live in Chicago, you will see a similar breakdown on your bill with things like various Cook County services in there.