Property taxes too high? Cook County Assessor Fritz Kaegi isn’t the problem
When Cook County Assessor Fritz Kaegi was sworn into office in December 2018, he thanked his family at the ceremony but also warned them: “Sorry to say I won’t be offering you any jobs.”
Kaegi, with his primary election victory in March that year, swept out incumbent former Assessor Joseph Berrios, who oversaw a property assessment system entrenched with nepotism and clout; infiltrated by powerful tax attorneys including House Speaker Michael Madigan and Chicago Ald. Ed Burke; and punishing to mostly minority communities that bore the burden of higher assessments to accommodate deals cut at the top.
Kaegi’s victory was a rare toppling of the machine. As a first-time candidate and government reformer, he ousted Berrios, a longtime politician who flouted ethics rules, thrived via backroom deals and leveraged the office’s tradition as a lucrative spigot for campaign fundraising.
But Kaegi’s celebration that day in December was short-lived. The machine immediately went to work discrediting his policy initiatives and questioning his processes. Reversing decades of systemic favoritism in property assessing has proved to be as tough as one might expect.
But the latest salvo seems exceptionally unsavory, even by Cook County’s standards: There’s a clandestine campaign afoot to build mistrust in his assessing capabilities.
A mysterious website
Renew Cook County is a website that launched in March. It describes itself as a nonprofit representing “the voice for tax fairness.” In testimonials on the site, business owners lament their tax bills with a “message for Fritz Kaegi.” He is mentioned numerous times.
The group’s representatives from Resolute Public Affairs, a consulting firm, won’t specify who is behind the website and they don’t have to. But it’s clearly an effort by large-scale property owners to discredit Kaegi and put pressure on an assessment system that needed dramatic overhaul. The corrections on assessments Kaegi has been pushing into the marketplace are costing commercial property owners more, and some residential homeowners too.
The backlash has been swift, particularly in Cook County where commercial and industrial properties by law are assessed at higher rates than homes, and where property taxes, due in part to lavish government spending on pensions, are among the highest in the country.
“The coalition has come together because of the numbers we’ve seen coming out of the assessor’s office,” Resolute’s Rob Nash told us. “The increases have been dramatic in the northern triad and we know those have real world implications for property tax bills. Especially in this economy, we need to have a real conversation about the challenges in the assessment system because the region will not recover if we have 40% increases based on massively inflated assessments.”
Kaegi says he has been upfront and transparent with property owners about the reasoning behind changes. In many cases in the past, commercial properties were not being assessed based on their actual market values. And if they were, wealthier property owners could hire attorneys and fight for reductions at the county’s Board of Review. Appeals of assessments have been on the rise for decades, long before Kaegi.
“The assessment system is about estimating the most accurate market value so no one gets favored treatment. That’s our duty. That’s what good stewardship means,” Kaegi told us.
The Tax Divide
Kaegi’s ascension to the assessor’s office was driven in part by “The Tax Divide,” an exhaustive 2017 Chicago Tribune investigation that revealed imbalance in the assessment system.
Wealthier Cook County communities and downtown commercial property owners could hire lawyers to appeal their assessments and eventually save money in property taxes. Lower-income communities in the county made up the difference through higher assessments. High property tax rates in poor communities remain the norm. Homeowners in Ford Heights, for example, pay much higher composite property tax rates than homeowners in Barrington.
Kaegi has been trying to correct the imbalance across the board by assessing properties based on their actual market values, a process that is even harder to gauge now, given the COVID-19 shutdown of state and local economies. Last year, he tried to get legislation passed in Springfield that would force large-scale building owners to disclose their rents and incomes so he could more accurately assess their value. That bill got buried.
“I’ve got to say, I have been a little taken aback by the chutzpah of (the Renew) campaign in the middle of COVID-19 … when all of the dreadful impact of the disparity we see is laid bare, and here they are wanting to double down on the disparity,” Kaegi said. “To continue sweetheart deals under an assessment system they know was failing, to me, that’s chutzpah.”
The real culprits
The reason property taxes are high in this state involves a mixture of elements, not just assessments. And it certainly isn’t a problem that developed since December 2018 when Kaegi took over.
Property taxes are based on what governments charge residents and property owners for services. School districts, libraries, park districts, municipal and county government — they ultimately determine the property tax burden for their taxpayers based on how much they spend. For all of them, a top expense is personnel and for some, that includes paying for the pensions of retired workers. Increasingly in this state, pension costs are putting pressure on local property taxes.
Have the big commercial property owners upset with Kaegi spoken up about that? Have they lobbied Democratic officials who run this state and Cook County to get realistic about costly pension benefits? Have they taken on organized labor leaders who aggressively guard pension benefits, even at great expense to state and local finances and taxpayers?
Have they lobbied Springfield to allow for more government consolidation? Have they encouraged school districts to merge? Have they pushed to reduce the numbers of local governments, including townships? Have they pushed hard and consistently to get rid of Cook County’s classification system that charges commercial and industrial properties at a higher rate than homeowners?
Have they questioned the long-standing conflicts of interest between politicians doing side work as tax appeal attorneys and then making, or ignoring, changes to the law that benefit their law practices? Or are the folks funding this new anti-Kaegi effort the same ones attending the Berrios and Madigan and Burke fundraisers?
Easing the burden of property taxes involves a lot more than criticizing the new assessor. The least the wizards behind this latest salvo could do is put their names out there. Instead, they choose to pressure Kaegi anonymously. Gee, wonder who’s behind it?