Public Watchdog.org

The Uncertain Effects Of Dropping EAVs

06.30.14

If you read the local papers last week, two headlines might have grabbed your attention: “Property Values Here Take A Hit” (Park Ridge Journal, June 25); and “Park Ridge city taxes could rise more than 16 percent (Park Ridge Herald-Advocate, June 26).

According to those articles, City Finance Director Kent Oliven is reporting that the numbers coming out of the Cook County Clerk’s office show a 17.8% drop in the equalized assessed value (“EAV”) of all Park Ridge property collectively. That’s the biggest drop of any taxing body in Cook County, and it is accompanied by Maine Township’s having the largest drop of any Cook County township.

Solely for comparison purposes, Niles’ EAV dropped 14%, Glenview’s 11.6% and Des Plaines’ 16.8%. And the average drop for the entire group of northern Cook County suburbs subject to the triennial reassessment of values for the years 2010 through 2012 was 12.8%.

One saving grace, according to Oliven, is that some of Park Ridge’s larger new developments – like the new Whole Foods store – do not appear to have been counted as part of the 2013 reassessment.  But, according to Oliven, the EAV of properties within the Uptown TIF have “fallen more than the rest of the city” throughout the past decade, and he expects that to be the case this time around as well.

What does that mean for the typical Park Ridge homeowner?

If we’re lucky, perhaps nothing.

Viewed in the most simple way, the City and our other local governmental bodies still need to collect a certain number of tax dollars to operate. So if the value of the taxable property declines, the tax levy rate needs to increase to produce the same tax revenues. Conversely, when the EAV goes up, a smaller levy rate can generate the same amount of tax dollars.

So if each of our local governmental bodies operated the “wise and frugal” government Thomas Jefferson envisioned and advocated, both the new EAV and the resultant new levy to be passed this December would probably be little more than a footnote – with a higher levy being assessed on a lower EAV. But as we keep on pointing out, none of our local governing bodies appear to be all that “wise” or all that “frugal” – although the City in recent years seems to have been doing a better job than the other local governmental bodies, especially the two school districts that keep spending and spending with no increases in objectively measurable performance vis-à-vis the upper-echelon comparable communities to show for it.

And despite the Park District seemingly doing a good job at aligning its operating expenses with its operating revenues over the past few years, we’re hoping “no” but betting “yes” that the debt service for the new non-referendum Centennial water park and the new referendum-based Youth Campus Park will start turning the District’s black ink into red.

But that likely won’t happen until most, if not all, of the current Park Board members responsible for both projects have left the Board; and until the mastermind of those projects, Director Gayle Mountcastle, has either leveraged her dubious achievement into a move to another District, or retired.

That’s what occurred with the perpetrators of the Uptown TIF who ordered the whole menu of bonded debt and subsidies for the private developers, then disappeared into private life while sticking the taxpayers with the bill – and leaving Mayor Schmidt and the current Council to unravel the mess and take the public shelling for all the bad financial news about the TIF and its adverse effects on the rest of the City’s activities like flood control.

It reminds us of that line from the movie “Under Siege,” where the Tommy Lee Jones character (a former CIA agent) succinctly explains his going rogue on the U.S. with: “I got tired of coming up with last-minute desperate solutions to impossible problems created by other [%$#@ing] people.”

The Uptown TIF may not be an “impossible” problem, but it’s unlikely to be solved in any better way than through one of those hold-your-nose deals that are becoming increasingly familiar to Illinois residents as they struggle to cope with the effects of at least 30 years of virtually non-stop corrupt governance by the likes of Mike Madigan, his Democratic toadies in control of the General Assembly, and the occasional Republican accomplices like former Govs. Thompson, Edgar and Ryan.

With the Uptown TIF, we can only hope that it was merely a stupid idea.

To read or post comments, click on title.

7 comments so far

I am not sure if I am asking this question correctly so please bear with me.

The values of our house declines. The increase that we receive from all of these governmental entities is going to rise to offset the decrease in our house values.

Isn’t there a limit to how much the overall tax bill can increase in Cook County for residential property? I thought the maximum increase for the total bill, on a non-tri-annual reassessment year was 5% or 7% or something like that; or does that just apply to commercial property?

EDITOR’S NOTE: Tax caps, also known more formally as the PTELL (“Property Tax Extension Limitation Law”), limit the yearly increase in taxes billed by a non-home rule taxing district to 5% or the rate of inflation, whichever is less. Such caps apply to both school districts and the Park District as non-home rule taxing districts, but they do not apply to the City because it is a “home rule” body.

If each governmental body asks for no more money than it did last year, your taxes should be the same as last year – except to the extent other property within each such taxping district declined in value more than yours did, in which case those other property owners will get a smaller bill while you and others like you will need to make up that shortfall.

Once again, that sounds like the Uptown TIF district at work.

Are you saying these reduced EAVs might have no effect on Park Ridge taxpayers?

EDITOR’S NOTE: There’s always that possibility, but we doubt it. For example, if the Uptown TIF properties’ EAVs dropped more than other Park Ridge property, as has been reported, the other Park Ridge property owners will effectively pay more to cover for the Uptown TIF properties’ lower tax revenue generation.

Thank you for a solid explanation of EAV, TIF and, in the comment above, PTELL. Sadly, it’s hard to complain effectively about one’s property tax bill unless those abbreviations are defined and the concepts understood. Another abbreviation — BOHICA — comes to mind as we watch the TIF metastasize.

Keep in mind, however, that the City’s TIF payments go straight to the non-home rule bodies, like the two school districts and the park district. That means the approximately 2/3 of your property taxes that go to the schools gets bigger and bigger all the time.

On top of that, the school districts continually push PTELL to its limits. They almost automatically increase their budgets to the legally allowable limit, year after year, the only exceptions being enormous increases like the ones allowed by public referenda.

In other words, we approved it — so can you blame them?

Actually, yes, we can (to coin a phrase). The school board we elect has the option to keep budgets level from year to year, or — if we can allow this to be said — cut back the budgets occasionally. There is plenty of administrative fat in there, so the students and parents wouldn’t even notice. The teachers might actually be able to do their jobs better.

So, calculate your EAVs, lower them as much as you can, pushing the burden onto your neighbors. The only way for everyone to reduce their property tax bills, however, is for local government to reduce their spending.

EDITOR’S NOTE: Exactly, FWT, except for your comment: “Keep in mind, however, that the City’s TIF payments go straight to the non-home rule bodies, like the two school districts and the park district.”

Some of the TIF district revenue may also be going toward the debt service owed on the bonds, although since the TIF runs deficits it’s hard to say exactly what expenses the insufficient TIF revenue is paying.

Thanks, Public Watchdog, for the correction on debt service being a part of the TIF payments. But….we wouldn’t have to worry about this distinction at all if we didn’t have to use a TIF to pay off the school districts and the park district so they wouldn’t sue the city for giving PRC a tax break.

EDITOR’S NOTE: If anything was “kinky” about that Uptown TIF deal (and we’re not saying there was, but we’re also not saying there wasn’t), it was the City’s selling the old “Reservoir Block” without getting a formal MAI appraisal as to the property’s fair market value; and the City’s decision to borrow and pay millions of dollars toward the parking garage and other “amenities” for the development.

The bribe money promised to the schools and the park district was just rancid frosting on a stale and tasteless cake.

Maybe property values will go up when word gets out that many PR homes are actually waterfront property…….as in water filling the streets….and the lawns….and some of the basements…..etc.

Sorry. I just could not resist.

EDITOR’S NOTE: No need to. But for those who seem to think that Park Ridge flooding is one of the levels of Dante’s Inferno reserved just for their neighborhood, you could replace “Wilmette” with “Park Ridge” and change a few street names and these stories would sound very familiar: http://wilmette.suntimes.com/news/government/stormeet-WIL-03202014:article and http://articles.chicagotribune.com/2013-07-16/news/ct-tl-ns-0718-wilmette-stormwater-20130716_1_sanitary-sewer-wilmette-raw-sewage

And the same goes for Glenview and Northbrook: http://articles.chicagotribune.com/2013-06-26/news/ct-tl-n-0626-flooding-20130626_1_glenview-northbrook-stankowicz

The point being with the increasing overland flooding is that overhead sewers and sump pumps and sewer backflow preventers will do absolutely nothing to prevent overland flooding coming in through residents’ basements windows and exit doors.

I live in the neighborhood bordered roughly by Crescent, Greenwood, Touhy and Cumberland. We have had more and more houses taking water in through their basement windows and walk outs over the last couple of years by rising flood waters coming from flooding streets. The empty lot at Chester and Crescent saw its open foundation hole overflowing with water last Monday night and into Tuesday by the flooding.

Sticking our collective heads in the sand and wishing it away will do absolutely nothing to stop the overland flooding occurring in Park Ridge. Nor will trying to blame individual takers and complainers for somehow not doing what to prevent it? Building a berm around their house? Digging a giant hole in their yards for flooding waters to go into instead of their basements?

EDITOR’S NOTE: You just made a case for the Citywide stormwater management plan proposed by Ald. Mazzuca that is scheduled to be discussed at next Monday’s (JUly 14) Committee of the Whole meeting. You should think about showing up and contributing your two cents, or even a nickel.

Maybe things will change now that both the Mayor’s home and the Police Station were taking on water this last rain. It was just a heavy rain. it wasn’t an epic storm, or a flood plain worthy storm. it was just a plain old regular thunderstorm with 3.0″ of rain and now the mayor’s home and the police station are feeling the effects. I’ll vote in favor of flood control for the entire city – This is ridiculous and eventually this is going to catch up with us and home values will be affected negatively.

EDITOR’S NOTE: They shouldn’t, and they probably won’t, because that would be stupid.

Park Ridge got 3.31 inches of rain in less than 12 hours, with manhole covers blown off the sewers on Devon Avenue.

Flood control for the whole City makes the most sense, assuming the taxpayers are willing to vote to pay for it.



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