Report verifies lack of uniformity in property tax assessments

Cook County Assessor’s Office releases Civic Consulting Alliance study

by Melanie Jongsma

CHICAGO, Ill. (February 19, 2018) – Initial findings of the Civic Consulting Alliance (CCA) analysis of the Cook County residential property tax system have been released. The summary report, available here, explains that the evaluation focused on four goals: uniformity, timeliness, compliance, and transparency. And the abstract summarizes those goals:

  • Regarding uniformity: “CCA has found that the residential assessment system is more variable and more regressive than agreed upon industry standards, causing a wealth transfer from owners of lower-value homes to those of higher-value homes.”
  • On timeliness: “The assessment process has met the standard that the bills be completed on time for the past six years.”
  • About compliance: “The system appears to be in compliance with the requirement that residential assessments are at 10% of market value.
  • As to transparency: “The system’s alignment with industry standards of transparency has not been evaluated, yet. Bringing the system into compliance with industry standards will require fundamental changes in modeling, review processes, data collection, and a shift away from reliance on appeals. Cross-departmental workshops to design solutions and implementation plans in each of these categories have begun.”

The findings reflect the first two phases of a five-phase project.

The process

In July 2017, President Toni Preckwinkle and Assessor Joseph Berrios asked CCA, a non-partisan, non-profit consulting firm, to conduct an independent, pro bono evaluation of Cook County’s property tax assessment system. The focus was to be on residential properties.

The goal of the evaluation was to gain understanding of the details of the entire assessment process—from data gathering through appeals to the Board of Review—so that necessary changes could be identified and, ultimately, implemented.

Over the past months, Josh Myers, a national expert in statistical analysis and assessment processes, has spent hundreds of hours reviewing the data and researching the best practices across the country, as part of the five-phase approach to the project:

  • Phase 1: Scoping (completed): Define the goals and associated measures of the assessment process, including industry standard target ranges that indicate whether the process is meeting those goals.
  • Phase 2: Diagnostic (completed): Analyze the outcomes produced by the current end-to-end process for one triennial assessment cycle over the three-year period, 2014-1016.
  • Phase 3: Solutions developed (now under way): For each area with improvement potential, develop a tactical solution through cross-functional teams with external expertise and staff from the Assessor’s office and the Board of Review.
  • Phase 4: Planning: Develop an implementation plan for all changes by sequencing initiatives appropriately, ensuring adequate resources and development oversight, and public reporting structures to ensure progress.
  • Phase 5: Implementation: Implement initiatives and monitor outcomes, likely over multiple years.

Findings

A sample of the kind of information available in the report is cited below:

Primary Conclusions from the Diagnostic Phase
First, outcomes produced by the current system are more variable than industry standard recommend across the County, driven primarily by the variability of assessed values within the City of Chicago.

  • For Chicago, this result approximates that a home worth $100,000 has 50% chance of being assessed between $75,000 and $125,000 and 50% chance of being valued further from its market value.

Second, outcomes produced by the current system are much more regressive than industry standards recommend – across the County, within each triad, and with the highest levels of regressivity within the City of Chicago.

  • For Chicago, a PRB of -0.24 means that the owner of a $600,000 home would be paying 24% lower effective tax rate than the owner of a $300,000 home.

(p. 11)

CCA’s findings coincide with what Assessor Joseph Berrios has been saying since taking office—that systematic problems have existed in the assessment system going back 40 years. Additionally, Cook County is investing heavily to upgrade technology for the property tax stakeholder agencies and modernize the existing 40-year-old system.

“As I have said from the start of the process, my priority is to ensure that the assessment system is fair and equitable for every Cook County resident,” said Assessor Berrios. “I am committed to implementing all of the solutions identified as part of the analysis.”

Other findings include:

  • The residential assessment system is more variable and more regressive than agreed-upon industry standards
  • The system appears to be in compliance with the requirement that residential assessments are at 10% of market value
  • Bringing the system into compliance with industry standards will require fundamental changes in modeling, review process, data collection, and a shift away from reliance on appeals

For more information

A copy of the full report can be downloaded from the Cook County Assessor website:

 

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