CHICAGO (CN) — A new analysis of Cook County's 2020 tax year found that low-income residents and communities of color - two groups that often overlap - are still shouldering the heaviest tax burden in the Chicago area.
"In what has become an all-too-familiar story, majority Black and Latino communities are being hardest hit with property tax increases," Cook County Treasurer Maria Pappas' office wrote in its analysis Tuesday. "That’s true for both homeowners and businesses in those areas."
The county collected more property taxes in 2020 than in any other year in its history – a total of $16.1 billion. It represents an increase of more than $500 million from 2019, and is nearly double the tax collection from 2001. This historically high tax haul was also collected from a shrinking tax base: Cook County's population dropped from 5.4 million in 2001 to 5.15 million last year.
All of the 10 most heavily taxed county municipalities - Park Forest, Phoenix, Riverdale, Harvey, Markham, Ford Heights, Calumet City, Country Club Hills, Hazel Crest and Dolton - are majority-Black. They are all also located in the southern part of the county, extending Chicago's own dynamic of a wealthy north side and poor south side beyond the city's border.
Businesses were also particularly hard-hit by the county's high property tax rate. While the median tax bill for homeowners in the county's southern townships was about $4,900 - a 2.9% increase from 2019 - the median tax bill for businesses in those same towns was closer to $14,800, a 7.2% increase.
Southern Cook County's proximity both to the less heavily taxed Will County and Indiana creates a negative feedback loop that discourages the buildup of capital in these communities, according to the treasurer's analysis.
"In many south suburbs, officials for years have expressed concern about maintaining vibrant business communities — or any businesses at all — given the ability of businesses to move across the border to Indiana or Will County, where businesses are taxed at lower rates," it states.
The county's northern townships, which are decidedly wealthier and whiter, were hit less hard by the tax haul. Northern homeowners and commercial property owners still paid a larger share of the county's tax burden in total, though the area's larger population and higher per-capita income means tax hikes weren't felt as acutely. Homeowners in municipalities north and northwest of Chicago only saw an increase of 0.3% to their taxes, while commercial property taxes were raised about 5.2%.
Deborah A. Carroll, director of the Government Finance Research Center at the University of Illinois - Chicago, said that part of what may be driving the inequity between communities is discrepancy between the time at which different properties are assessed.
"One thing is that within the county, it looks like places are being assessed at different points in time... it's not really an apples-to-apples comparison," Carroll said.
She explained that because real property tends to accumulate value over time, properties assessed more recently can appear to be worth more than those which have not been assessed for several years. A higher-value property translates into a higher property tax.
"Generally if they were assessed recently, that favors them having a higher value... because real property accumulates value over time," Carroll said.
The analysis from Pappas' office states that the county assessor’s office reassessed all suburban properties south of North Avenue in 2020, but many northern properties have not been reassessed since 2019.
The county's divide in tax burden between wealthy white communities and poor Black and brown communities - and the assessor's office role in that divide - has been called out many times before. The Chicago Tribune famously published an investigative series in 2017 examining the issue. In addition to the systemic issues of racial inequality that have stymied upward mobility for communities of color for generations, the series also traced unequal tax burdens to intentional racism and bureaucratic ineptitude.
Tribune reporters found that the Cook County Assessor's Office would often overvalue homes and businesses with minority owners, while white-owned properties would be undervalued - and thus undercharged come tax season.
"The valuations [of property] are a crucial factor when it comes to calculating property tax bills, a burden that for many determines whether they can afford to stay in their homes. Done well, these estimates should be fair, transparent and stand up to scrutiny," reporter Jason Grotto wrote. "But that’s not how it works in Cook County, where Assessor Joseph Berrios has resisted reforms and ignored industry standards while his office churned out inaccurate values. The result is a staggering pattern of inequality."
Exacerbating this inequality is Illinois' own statewide trend of rising taxes. Since 1990, property taxes have grown from an average of 3.6% of homeowners' income to more than 6.4%. This sharp rise in property taxes - outgrowing the median household income by more than three times over - means Illinois has the second-highest property taxes in the country, behind only New Jersey.
While property taxes are determined locally, an attempt to overhaul another unequal element of the tax system - the income tax - was made in the fall of last year via the Illinois Fair Tax Referendum. The referendum proposed an amendment to the state's constitution that would change Illinois' income tax system from a flat tax of 4.95% to a graduated tax based on household income.
The referendum narrowly failed, with 53% of voters rejecting it. Though the majority of the state's unions, legislators and political organizations, including Governor J.B. Pritzker and the AARP, supported it, the resolution was also opposed by a number of powerful individuals and institutions. These included billionaire Kenneth Griffin, the state's wealthiest resident, who personally contributed more than $46 million to the opposition campaign.
“Every citizen has a right to the truth about what Governor Pritzker and [state House Speaker] Mike Madigan’s tax increase will mean for our state," Griffin said in October, according to a Chicago Sun-Times report. "The continued exodus of families and businesses, loss of jobs and inevitably higher taxes on everyone."
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