Village Administrator offers suggestions for businesses facing drastic property tax increases

Online portal to help with submitting info to Cook County

By Josh Bootsma

LANSING, Ill. (January 7, 2021) – In the last Village Board meeting of 2020, Village Administrator Dan Podgorski led a nearly half-hour discussion on property tax increases, covering the basics of the property tax system in Cook County, why 2021’s tax bills will increase at an unprecedented rate, and what the Lansing community can do to help out its businesses.

What’s happening with property taxes?

Podgorski’s discussion of the issue followed vocal reactions from many Lansing businesses who are facing drastic increases in their tax bills next year. Some have even considered closing or moving to Indiana to avoid the anticipated tax burden.

During the Cook County Assessor’s reassessment of south suburban Cook County, many commercial and industrial properties in Lansing were assessed at a much higher value than in previous years. According to data available on the Cook County Assessor’s website, some values doubled, tripled, or even quadrupled.

As first reported in the December print issue of The Lansing Journal (and a few days later in the online version of the article), a prime example of the drastic increases is the property on the northeast corner of Roy Street and Ridge Road (3300 Ridge Road). This property houses Mancino’s Pizza & Grinders, Ooo Wee Chicken & Ribs, The Lansing Area Chamber of Commerce, and soon The Pour on Roy. The assessed value of the property quadrupled from $54,596 in 2020 to $216,643 in 2021. Assuming the equalized tax rate remains similar to last year, the taxes owed on the property will quadruple as well.

During the Village Board meeting on December 15, Trustee Brian Hardy, a business owner in Lansing, spoke on behalf of the “dozens” of other business owners he has spoken to about property taxes. “We don’t mind paying our fair share of taxes; it’s just that the increase was astronomical. It will literally put some businesses out of business,” he said.

Podgorski offers “Property Tax 101”

“We know that there is a movement by the Cook County Assessor’s Office to shift more of the property tax burden from residential property owners to commercial and industrial,” Administrator Podgorski said during the December 15 Board meeting. He said this is the trend seen in the northern suburbs, which were reassessed last year, and that Cook County Assessor Fritz Kaegi has said that shifting the tax burden to businesses is his priority. Kaegi took office as assessor in late 2018, replacing Joe Berrios, who had been Cook County Assessor since 2010.

“As a municipality, obviously, elected officials and those in the administration, our concern is for our own commercial and industrial property owners, we want to make sure they don’t get taxed out of business,” Podgorski said.

Podgorski explained that commercial and industrial properties are assessed at 25% of market value, while residential properties are assessed at 10% of fair market value. That 25% Assessed Value is then multiplied by an equalization factor that is determined by the Illinois Department of Revenue. For Cook County, that equalization factor is currently 2.916, though a new factor will likely be released in the spring of this year. Podgorski said that Equalized Assessed Value “is equivalent to 33¹⁄₃% of the median level of sales for properties in the previous three years.”

The increase in assessments does not necessarily mean an equal increase in taxes, Podgorski said, if the equalization factor were to change. However the equalization factor in Cook County has not dipped below 2.6621 since 2010.

Are local taxing bodies to blame?

Podgorski said the increase in property assessments is the cause of the massive tax increase facing some businesses next year, not local taxing bodies. Attorney Bill Sandrick of Sandrick Law Firm in South Holland said the same, and mentioned that Lansing’s tax rate is about average in the South Suburbs. He said South Holland and Thornton’s rate is comparable to Lansing’s; Calumet City, Dolton, and Harvey’s rates are higher; and Glenwood and Lynwood’s rates are lower.

Although local tax rates change from year to year based on the taxes levied by local bodies (the Village of Lansing, school districts, the Lan-Oak Park District, the Lansing Library, Thornton or Bloom Township, Cook County, etc.), the drastic spike in taxes that many Lansing businesses will likely face next year is a result of drastic increases in assessed values, not drastic increases in local tax rates. Whether or not local bodies’ tax rates are too high—especially given the increase in property assessments—is a separate, complicated question.

“If the county would learn how to assess property correctly, maybe this wouldn’t happen,” said Mary Thompson during the December 15 Board meeting. “This is not the first time that Cook County has assessed the south suburbs in this manner. They continually to do this. You have to be proactive.” Thompson is the Chief Financial Officer of Kane, Mckenna, and Associates, a financial services firm. She was at the meeting to speak about another item on the agenda, but was prompted by Podgorski to share her thoughts on the property tax discussion.

What can be done?

Podgorski mentioned a few practical steps that the Lansing community can take to help weather the storm of increased tax bills:

COVID adjustments – Podgorski said the Cook County Assessor is offering “COVID-adjusted reassessment valuations” to Lansing residents, and said, “I’m not sure if it’s just for residential or if it’s for commercial and industrial, but you want to make sure you receive it.”

“Could it possibly be because they’ve possibly taken some heat? I don’t know, it’s possible. But they’re calling it a COVID adjustment,” he said.

Making use of appeals – Podgorski urged property owners to file a property tax appeal with an attorney, something he said many businesses and homeowners likely already do. “Sometimes it becomes a sort of self-perpetuating process that never seems to end—you fight it for two or three years and you get your appeals going and you get your refunds, and then here comes another assessment and you’ll have to do it all again. But it’s a process you need to participate in,” Podgorski said.

Smart appealers, Podgorski said, will get their property appraised at least once so they can present those appraisals to the board that reviews property tax appeals.

Podgorski said comparing a property with similar neighboring properties is a smart move as well, as an unequal assessment for two similar properties may help convince the reviewing board to lower a property’s assessed value.

The window to file appeals for the most recent round of reassessments in Thornton Township closed in late September, while the window for Bloom Township properties closed in mid-November.

Village diligence in drawing new businesses – Podgorski said the Village of Lansing bears responsibility to continue to draw new businesses to Lansing and encourage development. He explained that more businesses in Lansing means a larger tax base, meaning each individual business in Lansing has to pay less. He mentioned using Class Eight tax incentives—which the Village regularly approves or renews for newer businesses—as a way the Village can build the tax base.

Village-established online portal

As a way to help Lansing businesses, Podgorski said, the Village of Lansing is working to create an online portal that will allow business owners to submit information such as their property’s address, PIN, assessed values for 2019 and 2020, and any recent appraisals to the Village of Lansing.

“We can forward that information not only to the assessor’s office, but we’ll work with our local representative on the Board of Review and request fairness in any assessments that don’t appear to be in line with the estimated fair market value of those properties,” Podgorski said.

Podgorski said on December 15 that he hoped this portal could be completed and ready for submissions in early January. He also said the South Suburban Mayors and Managers Association might provide another avenue to make Lansing business owners’ voices heard.

“For those of you who know business owners that really feel like they’re getting pinched, they can fill that out, and we’ll advocate on their behalf,” Podgorski said. “The last thing we want to do is to see our property owners walking away from their businesses because they just can’t afford it. That just wouldn’t be right.”

Related

• Cole & Young Jewelers to close after 146 years (December 22, 2020)

• Lansing businesses weigh options as property taxes spike (December 3, 2020)