Posted on June 27, 2012 11:25 AM
Decoding Property Taxes
Local news coverage this week has highlighted how difficult it can be to understand the process of assessing property taxes. The Chicago Tribune and Crain's Chicago Business both looked at the issue as it pertains to Cook County, and the County Clerk issued a tax rate report with details about the assessments in Cook.
Earlier this year, a Regional Tax Policy Task Force issued its advisory report to the CMAP Board, in response to the GO TO 2040 recommendation that state and local tax policies should be studied "through the lens of the regional economy, sustainability, equity, and the connections between tax policy and development decisions." In response to that task force report and subsequent guidance from the Board, CMAP staff have been investigating a number of related issues, including the region’s complex property tax system.
Today CMAP launched the first in a series of two issue briefs that shed light on the process of property tax assessment classification. Decoding Property Taxes and Classification explains how property tax rates are determined, what the taxes pay for, which government units get the revenue, and why property tax assessment classification matters. Using the brief's interactive, data-driven graphics, you can also compare the formula used in Cook -- where ratios vary depending on land use (residential, industrial, or commercial) -- with the across-the-board 33-percent rate in the region's other counties.
The first issue brief looks briefly at how property tax assessment classification in the region may impede business development. In July, the second in this series will look in greater detail at classification's effects on economic activity.