VIDEO: Understanding Your Cook County Property Taxes

When your property tax bill arrives in your mailbox soon, chances are you’ll be squinting to figure out the difference between your property value, your assessed property value and your equalized assessed property value.

After about four months of poking around the Cook County property tax system, one thing is clear here at Patch: It’s confusing, complex, and unwieldy, so much so that there’s not one particular kink in the system that we can point our fingers at to say, “aha, here’s the problem!”

And it’s not just us. Ask elected officials, the county assessor’s spokesperson, the assessor’s township representatives, and they all agree it's too complex. As Robert Porter, a former township supervisor, put it: “It’s like a car slamming into a wall at 60 mph.”

So this week we’re offering Patch readers a comprehensive guide to your property taxes, including a video and glossary (below), to demystify the seemingly arbitrary numbers that show up twice a year in your mailbox. We also uncover some surprising numbers, like how many dollars are lost each month the tax bills are delayed. (Hint: It’s in the millions).

The first thing you need to know is that Cook County is not like any other county in the state of Illinois. Our county uses a system instated in the 1970s known as the “ad valorem” process to assess how much your tax bill should be. Everywhere else in the state, prperty owners are taxed at a uniform, flat rate.

This tiered method, which affects businesses and residences differently, has wide-reaching consequences for the business landscape in our communities. As part of Patch's "Making Sense of Your Property Tax" series, in the coming days you’ll be able to:

• Read about the impact of the “state equalizer” tool through the lens of Joel Byron, a business owner who watched his property assessment double in one year;
• Learn how exemptions clog up the system for processing 1.8 million property units in Cook County, and how that can possibly mean you pay more in taxes than your neighbors;
• Discover why your school district, park district, library board and municipal government officials get together twice a year as part of a tax cooperative to prevent taxpayers' appeals;
• Find out why closing one business is tantamount, tax revenue wise, to shuttering two and a half homes, and why this matters to your property tax bill.

To get started, watch the animation video that illustrates the property tax system in two minutes, and skim over the glossary below for a refresher on your consumer economics vocabulary. When the first installment of your property tax bill arrives in a few days, you’ll be all patched up.

Property Tax Glossary

Check out the list of terms below to brush up on your property tax vocab.

BASIC CONCEPTS

Property Tax: The amount of money you pay to own property in a civil society in one lump sum. It is based on local tax rates for your local taxing organizations (i.e. schools, municipalities, libraries) and your property’s value.

Sales Tax: A cost added to each retail purchase. It is based on tax rates for your local taxing organizations and the dollar value of the item purchased.

Total Tax Burden: This is the amount of money that your local taxing bodies levy to fund their services. Most of the money goes to public schools.

Local Taxing Bodies: Organizations built to serve your community that require tax money to operate.

LEVELS OF VALUE:

Market Value: The dollar value of your property, determined by how much someone is willing to pay for it.

Property Value (PV): The dollar value of your property, as determined by the Cook County Assesssor’s Office, taking into account a variety of factors (i.e. the number of bathrooms in your home, the cost of the property next door, the age of your property). Properties in Cook County receive new assessments every three years.

Assessed Property Value (APV): The dollar amount of your property value that is taxable by Cook County. This number depends on your assessment level.

Equalized Assessed Value (EAV): The dollar percentage of your property value that is taxable by Cook County after the state’s Department of Revenue applies the equalization factor.

FISCAL TOOLS:

Assessment Level: This is numerical proportion (i.e. 10 percent, 25 percent or 33.3 percent) of your property value that Cook County taxes.

State Equalization Factor: A number determined by the Illinois Department of Revenue, this is a step multipled by Cook County property taxes to move the assessment level closer to the state's flat 33.3 percent tax rate for both residential and business properties.

Exemption: Discounts on your property tax bill if your property fits the necessary requirements. Taxpayers must fill out exemption forms with the Cook County Assessor’s Office to apply for the discounts.

Local Tax Rate: Determined by your local taxing bodies, this is the numerical rate used by Cook County to pay for local institutions. It varies according to township.

Total Tax Bill: The dollar amount you owe to the Cook County Treasurer’s Office to own a piece of property in the area where it is located; 45 percent is billed as the “first installment” in the following year, and 55 percent is billed as the “second installment” in the following year (i.e. you pay for your 2010 property bill in 2011).

PLAYERS

Township Assessor’s Office: Where the township assessor, an elected official, helps township residents file for appeals and exemptions to the Cook County Assessor’s Office.

Cook County Assessor’s Office: Where the Cook County Assessor (currently Joseph Berrios) and his staff of about 300 people decide on property values for Cook County business and residential properties. Appeal hearings take place in the downtown Chicago office.

Cook County Board of Review (BOR): This is the second level of appeal for property owners in Cook County. Three elected commissioners manage the BOR with the power to change any assessment by the Cook County Assessor’s Office.

Cook County Treasurer’s Office: The county treasurer’s office mails property tax bills, collects payments from residents and redistributes the funds to local taxing bodies.

Cook County Clerk’s Office: The clerk’s office determines the local tax rate for the townships in Cook County, according to the amount of money requested by local taxing districts. If you pay your property tax bill late, you also deal with the clerk’s office.