Tax talk: Cook vs. Will counties
Sunday, December 21, 2008
by Kristen McQuerey
Burger King's signature sandwich, the Whopper, loads 680 calories and 40 grams of fat into your digestive system.
Wendy's Gourmet Mushroom Burger packs 600 calories and 36 grams of fat.
But let me introduce some different numbers about these fast-food Goliaths.
Burger King at 183rd Street and Harlem Avenue in Tinley Park paid $61,310 in property taxes in 2007.
Wendy's, across the street, paid $16,418, a savings of $44,892.
Burger King is in Cook County. Wendy's is in Will County.
Because of Cook County's classification system, which assesses
commercial property at a higher level than residential, Cook County
businesses like Burger King pay more in property taxes than they would
outside Cook County. The impact on the Southland, given its proximity
to Will County and Indiana, is particularly ominous. Businesses are
The delightful Wheatfield Restaurant on Oak Park Avenue in Tinley
Park recently closed, crumpling under a $217,778 annual property tax
As part of an ongoing Sunday series examining property taxes, this
week we look at the business angle. Coming next week: Should you hire a
lawyer to appeal your tax bill? We'll examine.
Cook County's system of property taxation assesses residential
properties at 16 percent of their estimated market value while
assessing commercial properties at 38 percent of their estimated market
value. That's the law, anyway.
The rest of the state assesses business and residential properties at a flat 33 percent of their market value.
Let me throw one more factor into this complicated scenario: The
Illinois Department of Revenue then issues an annual "equalizer" to
bring Cook County residential taxpayers closer to the 33 percent they
ought to be paying. That equalizer, however, also bumps businesses into
a higher bracket.
Why this silly two-tiered system? Because Cook County officials can
say they're giving you a break on your assessment and blame the state
for that whacky equalizer while the state can blame Cook County for
How did we get here?
Delegates to the 1970 Constitutional Convention codified the
lopsided classification system for Cook County because of Chicago's
unique position. Why make homeowners pay the same flat 33 percent rate
as millionaire, downtown high-rise owners? The delegates created a
progressive tax structure, never envisioning the suburban sprawl that
would pit Oak Brook against downtown Chicago for company headquarters.
They couldn't foresee the day when DuPage and Will counties developed
into population hubs. They were cornfields.
And so the classification system has persisted, despite its inherent burden on businesses.
Taxpayers and the lawyers who win big tax breaks for their clients
like to dump on Cook County Assessor James Houlihan. But keep in mind
he inherited this mess. He has called for an end to classification as
part of an overhaul of our state's tax system in general, from income
taxes to sales taxes to school funding formulas.
I agree with him. That's why I wanted a constitutional convention.
You'll never get lawmakers in Springfield, no matter who they are, to
tackle an issue like classification without a convention.
The classification system will continue, although the Cook County
Board this fall tweaked the numbers per Houlihan's request. Residential
property owners beginning next year will be assessed at 10 percent of
their estimated market value while commercial and industrial will be
assessed at 25 percent.
Before you start ordering cases of champagne, don't expect these
changes to affect your tax bill. The state has long argued that Cook
County uses the 10 and 25 numbers anyway, despite the steeper 16
percent and 38 percent system.
Even though residential taxpayers are supposed to be paying 16
percent of their assessed market value, they've always paid only about
10 percent. Same for commercial.
By putting the 10 percent and 25 percent figures into county
statute, Houlihan basically acknowledged the lower numbers have been
common practice for years - even though he had his own spin.
"What it does is provide more clarity to the assessment process. It
makes it easier to understand," Houlihan spokesman Eric Herman said.
"That's the purpose."
Now go have a mushroom burger. And fries. If you got through a column about property taxes, you earned it.