May 13, 2024

Property tax reform: an in-depth look at how the system affects Cook County taxpayers and communities

Cook County’s elected leaders are taking an in-depth look at how the property tax system affects taxpayers and the communities that need services to thrive.

The Chicago Metropolitan Agency for Planning (CMAP) and the University of Illinois Chicago (UIC) Government Finance Research Center partnered with the Office of Cook County President Toni Preckwinkle to form the Property Tax Reform Working Group, which analyzes property tax relief tools, including homestead exemptions, incentive classifications, and the sale of delinquent taxes. The working group's analysis on homestead exemptions was presented at an Illinois House Revenue and Finance Committee meeting on Thursday, May 9.

Illinois offers several types of homestead exemptions that can help lower a home’s property tax bill. While an exemption can offer vital tax relief to the homeowner, it also shifts part of the burden onto other taxpayers through higher rates.

In 2023, CMAP and UIC analyzed how exemptions (which reduce a home’s taxable value) can affect taxpayers and taxing districts differently as well as options to mitigate some unwanted effects and enhance homeowners’ savings. The report, Current and future use of homestead exemptions in Cook County, shows that taxpayers seeking exemptions in some areas — particularly in the South Suburbs — save much less than what proponents anticipate and what is reported on their tax bills.

In 2021, exemptions removed $16.7 billion from Cook County’s property tax base. Part of that burden is shifted to others — primarily to business properties and (less so) multifamily residential where renting is common. But higher tax rates apply to all property owners in the community, even those claiming the exemptions. This can erode the savings for homeowners and raise costs for businesses.

Homestead exemptions are not unique to Cook County, but the impact can be more significant in some places. A key example: in 2021, the tax rate increase due to exemptions was 14.5 percentage points in the Village of Park Forest, ten times higher than the median among Cook County municipalities (1.4 percentage points).

The analysis also includes:

  • Three paths Cook County can take to help improve outcomes

  • A look at the current use of homestead exemptions in Cook County

  • How homestead exemptions could be funded differently

 

Read a summary of the analysis. Learn about this and more in the regional economy newsletter.

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May 13, 2024

Property tax reform: an in-depth look at how the system affects Cook County taxpayers and communities

Cook County’s elected leaders are taking an in-depth look at how the property tax system affects taxpayers and the communities that need services to thrive.

The Chicago Metropolitan Agency for Planning (CMAP) and the University of Illinois Chicago (UIC) Government Finance Research Center partnered with the Office of Cook County President Toni Preckwinkle to form the Property Tax Reform Working Group, which analyzes property tax relief tools, including homestead exemptions, incentive classifications, and the sale of delinquent taxes. The working group's analysis on homestead exemptions was presented at an Illinois House Revenue and Finance Committee meeting on Thursday, May 9.

Illinois offers several types of homestead exemptions that can help lower a home’s property tax bill. While an exemption can offer vital tax relief to the homeowner, it also shifts part of the burden onto other taxpayers through higher rates.

In 2023, CMAP and UIC analyzed how exemptions (which reduce a home’s taxable value) can affect taxpayers and taxing districts differently as well as options to mitigate some unwanted effects and enhance homeowners’ savings. The report, Current and future use of homestead exemptions in Cook County, shows that taxpayers seeking exemptions in some areas — particularly in the South Suburbs — save much less than what proponents anticipate and what is reported on their tax bills.

In 2021, exemptions removed $16.7 billion from Cook County’s property tax base. Part of that burden is shifted to others — primarily to business properties and (less so) multifamily residential where renting is common. But higher tax rates apply to all property owners in the community, even those claiming the exemptions. This can erode the savings for homeowners and raise costs for businesses.

Homestead exemptions are not unique to Cook County, but the impact can be more significant in some places. A key example: in 2021, the tax rate increase due to exemptions was 14.5 percentage points in the Village of Park Forest, ten times higher than the median among Cook County municipalities (1.4 percentage points).

The analysis also includes:

  • Three paths Cook County can take to help improve outcomes

  • A look at the current use of homestead exemptions in Cook County

  • How homestead exemptions could be funded differently

 

Read a summary of the analysis. Learn about this and more in the regional economy newsletter.

To Top
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