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Property tax bills in the mail

State is not imposing a multiplier

Published: Friday, May 2, 2014 2:06 p.m. CDT • Updated: Friday, May 2, 2014 3:07 p.m. CDT

Spring means warmer temperatures, budding trees and flowers and the return of songbirds.

And, of course, your property tax bill.

This year's tax bills were mailed out Friday, according to the McHenry County Treasurer's Office. The two installments this year are due June 4 and Sept. 4.

Property tax bills are each landowner's share of what they owe to county taxing bodies based on the value of the land and the structures on it during the previous year – this year's bills are for properties' worth in 2013.

Taxing bodies are entitled on this year's bills to a 1.7 increase to their extensions under the tax cap. But in a positive sign, the Illinois Department of Revenue for the first time in four years is not slapping a state multiplier on tax bills that would have increased everyone's taxes despite assessment appeals or whatever people did or did not do to their homes and businesses.

About 7,100 people appealed their assessments for this year's taxes, according to the annual report from the McHenry County Office of Assessments. It marked the first decrease in eight years. The office received more than 10,413 appeals in 2012 as taxpayers tried to keep their tax bills from increasing, despite the fact that home values plummeted as a result of the bursting of the housing bubble that sparked the Great Recession.

The median sale price for single-family homes in McHenry County rose 10 percent from $140,000 in January 2013 to $154,000 in March 2014, according to Midwest Real Estate Data. Residential home sales increased 26.7 percent in 2013 over 2012. But County Assessor Robert Ross in his annual report warned not to jump to conclusions that the market has stabilized.

"However, before we declare the McHenry County housing market stabilized we will have to wait and see the number of new foreclosures and bank-owned sales that arrive on the market in the upcoming year. In addition, there was an exceptional amount of corporate activity in McHenry County as well as the greater Chicago residential real estate market that cut into the available supply and drove up prices for existing homes," Ross wrote.

The large number of appeals in recent years were triggered by the fact that property tax bills stayed same or increased in recent years despite decreasing property values. The ironic culprit has been the very law passed to protect taxpayers from excessive taxation.

State lawmakers imposed the tax cap, or the Property Tax Extension Limitation Law, on McHenry and other collar counties in 1991 to rein in double-digit annual tax increases. The law limits the increase that taxing bodies can receive over the previous year to either 5 percent or the rate of inflation, whichever is less. Governments that wanted more had to ask voters via referendum.

But the tax cap has an unforeseen consequence when home values decline. In a declining market – a scenario that state legislators never considered – the tax cap ensures governments receive that inflationary rate of increase if they choose to capture it. As a result, many local governments have made sure each year to raise their tax rates to capture that inflationary increase, but a growing number have opted not to do so out of respect for taxpayer frustration, or have been unable to do so because they have reached their statutory maximums.

Townships in the coming months will start publishing assessments for this year's values on which 2015 tax bills will be calculated. Townships began pushing up their traditional timetables last year in order to accommodate the increase in appeals – property tax bills cannot be mailed until every appeal is settled and the values of all 149,000 parcels in McHenry County are finalized and set.

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