Thursday, February 05, 2004
Chicago Tribune
by Ray Long and Molly Parker

SPRINGFIELD -- The Illinois House rejected a measure Wednesday that was designed to slow the rise in property tax bills for homeowners in Chicago and suburban Cook County neighborhoods where property values are soaring.

The measure, pushed by Cook County Assessor James Houlihan, was rejected on a 61-49 vote.

Though business groups opposed the measure, contending it would unfairly shift more tax burden to commercial and industrial properties, there were strong indications that it was derailed largely because it focused only on Cook County.

Over and over again, Downstate and collar county lawmakers criticized the bill for shutting out their property-tax beleaguered constituents from relief.

"If they included at least the collar counties with the option, I think there'd be enough votes to pass it," said Rep. Lee Daniels of Elmhurst, the former House Republican leader. "We need the same kind of relief."

Rep. Lou Lang (D-Skokie), who sponsored the measure for Houlihan, said the rest of the state wasn't included simply because leaders from other counties didn't ask.

"Since no other counties actually asked to be involved in the bill, we limited it to the one county that did ask," said Lang, adding that he was unsure whether the bill would be rewritten to be more inclusive.

A spokesman for Houlihan said the assessor is open to adding other areas of the state to the bill, but hadn't done so because he had no data to evaluate how it would impact areas outside of Cook County.

Houlihan has said he needs quick approval of his plan, which would cap assessment increases at 7 percent a year, to apply the limit to tax bill installments to be mailed out later this year that will reflect big assessment increases in Chicago.

"It is not a total solution, but it is the best solution we can provide right now," Houlihan said.

In an unsuccessful attempt to draw more support, the measure was amended Wednesday to prevent homeowners with extremely pricey properties from realizing a big windfall because of the assessment caps.

Despite the vote, a spokesman for House Speaker Michael Madigan (D-Chicago) said Madigan would work with Houlihan to try to refine the proposal so that it could win approval.

The defeat was clearly a setback for Houlihan, who had stepped up efforts to lobby the General Assembly for the caps last summer as reassessment notices sent to city homeowners fueled widespread anxiety about big increases in property tax bills. Houlihan went to Springfield on Wednesday along with several Chicago aldermen to lobby for passage.

During debate, Rep. John Fritchey (D-Chicago) appealed for votes from lawmakers across the state who received support in the past from Chicago legislators on narrow regional issues ranging from coal mining to agriculture. He begged for their help in aiding Chicago homeowners now and pledged to support legislation to help the rest of the state later.

Fritchey maintained that many residents of rapidly gentrifying neighborhoods have seen the values of their homes rise astronomically on paper, but are left struggling to come up with the cash to pay property tax bills so they can hold on to their homes.

"They are not millionaires," Fritchey said. "They are schoolteachers, they are firemen, they are retired librarians, they are your next-door neighbors. They bought houses years ago, they invested in their community."

But Rep. Dave Winters (R-Shirland) argued that communities throughout the state need property tax relief too.

"Chicago, along with Rockford, has lost more industrial jobs than any other area in the country," Winters said. "We're over 11 percent unemployment in Rockford, and yet you think that it's best that we only apply this to Chicago? Is that a different state than Illinois? Why do the bills that we pass only concern Cook County when it's good for the taxpayer, and you don't allow us to expand it to the rest of the state?"

Despite soaring reassessement values in many Chicago neighborhoods, a Tribune analysis of data provided by Houlihan's office indicates the financial hit to homeowners may not be as bad as many had originally feared.

Most city homeowners can expect increases in their tax bills this year--and well into the double digits on the nearly one in four residential properties socked with assessment increases of 50 percent or more. But Houlihan's data anticipate drops in tax rates to compensate for higher property valuations, so the increases should be far more modest than the assessment hikes suggest.

Meanwhile, homes that increased in value by 20 percent or less--about one of every five in the city--should see cuts in bills, according to the analysis of Houlihan's numbers.

The first installment of Cook County property tax bills hit mailboxes last week, but those bills do not reflect the effects of the big assessment increases. That will come in the second installment, to be mailed out in late summer or early fall.

Properties in Cook County are reassessed, on a rotating basis, every three years. That means the wallop from any reassessment is front-loaded into the next tax bills that reflect the new appraisals.

The battle lines on Houlihan's proposal were first drawn Wednesday as the measure was approved by the House Revenue Committee.

House Majority Leader Barbara Flynn Currie (D-Chicago), who sponsored the new version of the legislation, said it was "meant to cushion the impact of rapidly increasing real estate tax assessments."

But business groups argued the property tax burden would be shifted to their properties. And they contended that many homeowners in neighborhoods where values weren't rising quickly would end up paying more to reduce the taxes of homeowners with more expensive properties.

Douglas Whitley, who heads the Illinois State Chamber of Commerce, maintained the Houlihan effort was a "smoke and mirrors" populist gimmick.

Robert Grossi, a treasurer for schools in Bloom Township, said he calculated that not all school districts would be winners under the legislation.

Had the proposal been in effect last year, he contended, Park Forest Elementary School District 163 would have lost about $384,000 in revenue.