When homeowners in Riverside, Brookfield and North Riverside opened up their property tax bills earlier this month, many of them likely received a bit of a shock. Increases of $325 to $500 were common, and some increases were as high as $1,500 or more.
Why? There were no referendums in the last couple of years and tax levies for local districts were still capped. The two biggest levy increases for tax year 2010 in Riverside, for example, was Cook County and Triton College. But even at that, the two taxing districts make up just 7.8 percent of a Riverside resident’s total tax bill.
The reason, it turns out, is because the county is in the midst of phasing out its 7-percent Expanded Homeowners Exemption, the result of a compromise by the state legislature to shift the burden away from commercial property owners, who were left with making up the difference when the 7-percent exemption went into effect in 2005.
For tax year 2009, which was paid in 2010, the maximum homeowner’s exemption for Cook County property owners south of North Avenue was $26,000. For tax year 2010, paid this year, the maximum is $20,000 of a property’s equalized assessed value. When the phase out is complete in 2013, the maximum exemption will be just $12,000 of EAV.
So be prepared for even higher tax bills in the future, even if the market value of your home and your property assessment has decreased.
“That’s the way the legislation was written,” said Fran Sitkiewicz, Riverside Township’s assessor. “The problem with the exemption is it shifts the burden; it doesn’t take away the burden.”
And that burden is falling harder on residential property owners. And because of the way the phase out is being implemented, it is hitting newer homebuyers hardest. For longtime homeowners in Riverside, taxes increased due to the exemption phase-out by about $435.
For North Riverside residents the increase was either $385 or $330, depending on which township the home was located in. In Brookfield, again, depending on the township, the increase was between $395 and $500.
Because the phase-out increase was basically a flat rate for all taxpayers receiving a homeowner’s exemption, the percentage increase in a person’s tax bill depended on how much their property was worth.
Those with a home valued at $750,000 saw their tax bill increase by between 2 and 3.5 percent due to the phase-out. But for those whose homes were valued at $250,000, the phase-out represented a 9- to 10-percent increase in the total tax bill.
“Everywhere, the problem is that when you have a flat $433 increase, it doesn’t matter whether the tax bill is $4,000 or $10,000,” said Ali ElSaffar, president of the Cook County Assessors Association. “So when you have a flat deduction in the homeowner’s exemption, people with lower tax bills are going to pay a higher percentage increase.”
And that doesn’t count the annual levy increases by government bodies. In Riverside, the total levy in 2010 increased by 4.2 percent. In North Riverside, the levy increase was 3.17 percent, according to figures provided by ElSaffar. It was too difficult to get a village-wide levy growth figure in Brookfield, ElSaffar said, because of the plethora of school districts that serve the village.
Even harder hit are people who have bought their homes more recently, said ElSaffar. People who purchased their homes in 2009, said ElSaffar saw their homeowner’s exemptions plummet to the minimum in 2010, even if they had received the maximum exemption the previous year.
In Riverside, anyone who bought a home in 2009 and received the maximum exemption of $2,079 when they paid that year’s taxes in 2010, said ElSaffar, was likely shocked to open their tax bill earlier this month and see that the amount of the homeowner’s exemption for tax year 2010 was $494.
“If you bought your home in the past two years, this is the homeowner’s exemption you will get,” ElSaffar said. “That’s the biggest problem. They’re taking the biggest hit, and you just feel awful for them.”