In 1978, California voters passed Proposition 13, a state constitutional amendment known as “The People’s Initiative to Limit Property Taxation” and designed to protect older homeowners who voters believed had been hurt by increases in assessed values of homes in which they’d lived for decades.
Under Prop 13, California established “base-year values,” meaning that if nothing else changes about your home in terms of renovation or reconstruction, you are assessed on the value of your home only at the time of your purchase and that assessed value does not change. The amendment also restricted the rate of increase of that assessment to no more than 2% each year, and it limited property taxes to 1% of that assessed value (plus additional voter-approved taxes, based on that same assessment).
Illinois has a very different and far more rancorous system.
Those politics and, yes, that rancor, are very much on display in the fiercely contested race for Cook County assessor between the incumbent, Fritz Kaegi, 54, whom we have endorsed before, and his challenger, Lyons Township Assessor Patrick J. Hynes, 53, who worked for 23 years in the office of the Cook County assessor, including time under Kaegi himself, meaning that Hynes is running against his former boss. Kaegi is a man, it was clear from our joint meeting with the two candidates, the fired-up Hynes considers professionally incompetent.
The system is fraught with politics because residential and commercial spaces here are constantly reassessed: every three years within Cook County and every four years within most other Illinois counties. In Cook County, one-third of the taxable stock of property is reassessed each year, which means that a current market value has to be established for every parcel, a herculean bureaucratic task in a county as big as Cook. We’ve all learned that to our collective cost with the chaos surrounding late property tax bills and the subsequent late delivery of funds to the taxing bodies relying on them.
That’s not even the half of it. There are myriad appeals processes open to anyone who is dissatisfied with their assessment, creating a paradox with which anyone who has bought and sold property in the county is all too familiar.
When it comes to selling, say, your condo, you want to argue it is worth as much as possible, but when it comes to the assessed value of the property (easily visible in any transaction), both seller and buyer are incentivized to minimize that worth.
That’s where property tax attorneys enter the picture.
For a contingent fee (typically one-fourth or one-third of the savings), these attorneys will draft an appeal to the assessor and then also to the Cook County Board of Review, a separate elected body that theoretically oversees the assessor’s work but in our experience follows entirely different criteria. Appeals can go on for years. And believe us when we say there are some very colorful characters on the Board of Review (more to come on that).
Since lawyer fees are contingent, many residential property owners appeal every time to all hearers and usually are successful. Time after time in our residential experience, the Board of Review would knock back the assessor’s assessments (the criteria applied being different), thus rewarding the many attorneys who know how to game a system with myriad opportunities for corruption.
In 2017, this newspaper published an investigation concluding that former Assessor Joseph Berrios disproportionately penalized lower-income homeowners while rewarding wealthy property owners: “Moneyed insiders in tandem with politically connected tax appeal lawyers won favorable valuations,” this board editorialized in 2022, “as long as they kept donations coming to Berrios’ campaign coffers. Nepotism and patronage ran rampant. Ethics rules went ignored. Year after year, it was the county’s Black and Latino populations that suffered the most under Berrios’ system, through disproportionately higher property taxes.”
This is the point at which we note Hynes worked for Berrios and in our meeting left us with the sense that he preferred the way Berrios ran this office (sans the corruption) to the way it has been run by the incumbent. We can’t agree with that and it is a factor in our choice to continue to endorse Kaegi for this office, even as we acknowledge there is blame to share regarding the current property tax billing shambles, even if we landed that one primarily at the feet of Cook County Board President Toni Preckwinkle.
Here’s the other issue of interest to voters. In crude terms, Kaegi has had his thumb on the scale in favor of residential voters and Hynes clearly would favor commercial taxpayers. The endorsements and campaign war chests reflect those opposing preferences.
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This is a conflict baked into the Cook County system. Government gets its money no matter who pays what; it’s the assessor’s job to apportion the revenue fairly, with assessed values being the main variable. But assessment is as much an art as a science, and the fair value of a commercial building in particular is hard to determine, especially in the current reality where Chicago is drowning in excess office space and seeing drastic drops in the value of commercial real estate (we’ve written often about that problem and the price homeowners are paying as a result).
To Hynes’ mind, Kaegi favored homeowners at the expense of the commercial sector and the Board of Review was doing its job when it responded affirmatively to appeals. To Kaegi’s mind, his assessments were fair, transparent and accurate and the Board of Review’s both opaque and susceptible to outside influence.
Hynes argued that as assessor for Lyons Township after he ran, presumably screaming, from Kaegi’s office, he had to spend too much time correcting “garbage data.” Kaegi argued the system was broken when he started and that his work has been to correct past corruptions. He said he had run “a clean office,” was a fighter for homeowners, that the success rate of appeals was going down and that he had committed to take “no campaign fund from property tax attorneys.”
This is one of those offices that to the outside observer should not be so political (ya think?). Welcome to Cook County.
Hynes, when it came down to it, argued to us that residents should essentially get on board with the need to encourage the renewal of the commercial sector for the benefit of all. Developers are of this mind and generally so are we. Like Hynes, we’ve lamented the lack of cranes in the sky, to cite the metaphor of choice, on many occasions.
Kaegi, when it came down it, argued to us that there is an affordability crisis for homeowners and that a good assessor should be worrying about that more than the developers’ complaints. We’ve lamented that very problem, which has no need of a metaphor, on many occasions.
But we see the encouragement of the commercial sector as the job of the mayor, primarily, and the affordability problem for homeowners as emanating primarily from government entities sucking up revenues and refusing to trim their sails. The main question when it comes to the assessor is competence, or lack thereof, and their ethics, or lack thereof.
We’ve always found Kaegi to be a fundamentally fair and decent man who has genuinely managed to avoid conflicts of interest. He’s an intellectual who thinks deeply about the issues with this system, has an excellent command of his data and its implications, and who has cleaned up the office following the sordid Berrios years.
We do think, though, that commercial property owners have a point when they grumble that the brutal losses they’ve suffered have not been sufficiently acknowledged by Kaegi’s office. If he is to win another term, that should change.
That said, Hynes isn’t the solution to the problem. He has the vibe of a disgruntled ex-employee, a former Kaegi worker turned bitter rival. We found some of Hynes’ aggressive rhetoric off-putting. When it came down to it, we did not think he had a clearly articulated plan of demonstrable fairness. And we really do not want to go back to the bad old Berrios days, which would tempt us to move to California.
Kaegi is endorsed for Cook County assessor.
Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.
