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Berrios a Cinch for Assesor

Russ Stewart 28 August 2009 One Comment

It’s often said that it ain’t over until it’s over. The 2010 contest to replace retiring Cook County Assessor Jim Houlihan is over. His successor will be Democrat Joe Berrios, a Board of Review commissioner known fondly as “Mr. Moneybags.”

Already a political powerhouse, Berrios, age 57, is poised to become a superstar. He’s the Cook County Democratic chairman, 31st Ward Democratic committeeman, and has been on the Board of Review since 1988, where the assessor’s assessed valuations can be sliced. He has $846,883 in his campaign account, and has raised $3,282,859 since Jan. 1, 2007. As assessor, Berrios can rake in $2 million a year.

No credible opponent is challenging Berrios. Bill Shaw, a black former Board of Review commissioner, has announced. Houlihan’s chief deputy assessor, Mike Stone, may run. Both would lose.

It’s also said that one should be careful what one wishes for, since you might get it. Berrios, who has long dreamed of being assessor, will need the proverbial wisdom of Solomon during his term. Quite succinctly, his looming problem is that  property values are plummeting while government spending is increasing. Therefore, property taxes will not decrease.

“Try explaining that to property owners,” observed one Northwest Side Democratic politician. “That’s why Houlihan quit. Berrios was going to challenge him in the primary, and blast him for not reducing property taxes. He (Houlihan) would have lost. In 2014, Joe (Berrios) will have the same problem. People will not pay higher taxes when their property has lower value.”

Unless, of course, the foundering real estate market rebounds significantly. At present, according to an August report by First American CoreLogic, over 30 percent of the Chicago-area single-family homes have mortgage debt that exceeds value. Three years ago, that percentage was zero. According to the Illinois Association of Realtors, the median sale price of Chicago homes dropped from $255,000 in 2008 to $213,500 in 2009. And, according to a University of Utah study, nationwide home ownership, due largely to the foreclosure epidemic, has declined by two percent, to 67.4 percent, and is fast approaching the 65 percent level of the 1960s.

Since 2005, Chicago-area residential property values have declined by more than 25 percent, but average property taxes have increased by ten percent.

Residential property owners absorb 48 percent of the county’s tax burden, with those taxes apportioned among dozens of local school districts and government entities, none of which are busily cutting costs. Amid the recession, government spending is increasing. A state income tax would have provided a buffer for those perpetual increases. Without it, the property tax burden will soon hit 55 percent.

Berrios noted that recent reassessments of property in the upscale Lakeview area, stretching northward from Lincoln Park along the Lake, evidenced “shocking” declines in property values. He proposes “opening up the system” so that property owners can appeal the assessor’s determination of assessed valuations before the tax bill is issued.
At present, in January of each year, the assessor mails a notice of assessed value to property owners of every county parcel. They have 30 days to appeal direct to the assessor – and very few do. Thereafter, the Board of Review, composed of three commissioners – Berrios, Larry Rogers and Brendan Houlihan – accepts appeals of assessed valuations, the bulk of which emanate from commercial and industrial property owners, who base their appeal upon such criterion as vacancies, obsolescence, and economic hardship. Most receive reductions.

Homeowners, however, must prove a lack of uniformity, demonstrating that they are taxed higher than comparable property, or that their parcel has declined in value, which requires an appraisal, usually costing around $400.

Residential property is given an assessed valuation equal to 16 percent of the “market value,” as evidenced by the most recent property sale, or by some arbitrary determination by the assessor, based on square footage. The result is a two-tiered tax apportionment, with recent purchasers paying taxes based on exorbitant purchase prices that no longer reflect the property’s value, and longtime owners paying relatively low taxes based on under-valuations.

On the Northwest Side, a parcel worth $300,000 has an assessed valuation of  $48,000. The tax is computed by using the state multiplier and the overall tax rate (which always increases), and deducting the homeowner and senior citizen exemptions. Hence, a $300,000 home would pay roughly $5,000 in taxes. The bulk of area homeowners pay less than $5,000 in taxes, but many pay considerably more. If the latter succeed in reducing taxes on their over-valued homes, thereby slicing overall tax receipts, then the former will be socked with increases on their under-valued homes.
Berrios promises to “expand outreach” to taxpayers. He asserts that the assessor’s computer system “needs to be upgraded” to allow “more input as to current property values…especially data on declining values.” Of the county’s l.6 million parcels, only a fraction are sold every year, and only a third of the county is reassessed annually. Berrios was vague on the type of data, use of the data, and number of new assessor’s employees required to process the data. Property values can’t be measured like water usage. An arbitrary system will become even more arbitrary, with King Joe in charge.

Another bright Berrios idea is to expand the assessor’s appeal period to 60 or 90 days, and provide “one-on-one interviews with staff.” That would result in utter, absolute chaos. The assessor’s satellite offices in Skokie, Rolling Meadows, Maywood, Oak Lawn and Markham, now staffed by 10-12 employees, would be  besieged daily by thousands of irritated and hopeful homeowners, particularly seniors. They would wait hours, only to be told that their home is already under-assessed, or that they failed to provide an appraisal proving that it is over-assessed.

Every day, Berrios will make thousands of enemies.

And then there’s tax collection paralysis. If the assessor dawdles until March or April in setting assessed valuations, then the Board of Review won’t close the appeal period until June, and the county Treasurer won’t have the requisite two million second installment tax bills ready for mailing until December. That means a fiscal crisis for every governmental body expecting tax dollars in September or October.

The taxing bodies, including Chicago and Cook County, set their budgets in December preceding the fiscal year, and forward them to the county treasurer. After factoring in all other revenue, the treasurer determines the levy to be derived from property taxes. That amount cannot be severely reduced. If the assessor reduces the assessed valuation, the treasurer will simply increase the tax rate, so as to generate the amount of revenue required.

For Berrios, being a “tax reformer” is out of character, and a lose-lose situation. He’s a “pay-to-play” politician. Encouraging thousands of homeowners to appeal their assessed valuation will generate animosity, not contributions.
Enduring Cook County politicians heed this advice: Shut up. Lay low. Make no waves. And blame everybody else. If Berrios is truly wise, then he will forget in 2011 every promise he made in 2009 and 2010. If he doesn’t, he will be reviled, ridiculed and defeated – no matter how much money he raises.

Cook County Board president: Conventional wisdom presumes that Todd Stroger is dead meat in the 2010 Democratic primary, particularly since he will have two or three black opponents – Toni Preckwinkle, Dorothy Brown and/or Danny Davis – and just one credible white foe, Terry O’Brien. That should make O’Brien the favorite.

Further, rumors are rife that the Daley Machine will ultimately coalesce behind Preckwinkle, much as it did behind Anita Alvarez in the 2008 state’s attorney primary. The Daleyites want to get rid of The Toddler, who is deemed an embarrassment.

But a Stroger win is possible, and that makes the Republican nomination valuable. Paul Vallas and 2006 loser Tony Peraica have passed, but two credible nominees have surfaced: Roger Keats, age 62, a wealthy stockbroker, former North Shore state senator and retired lieutenant colonel in the U.S. Army Reserves; and  John Garrido, age 42, a Chicago police lieutenant, former homicide detective, 18-year police veteran and attorney. Garrido resides on the Northwest Side, and is of Irish-Mexican descent.

The party apparatus is behind Keats, who is likeable, credible and articulate. But the party needs candidates of the caliber of Garrido, a Hispanic with law enforcement credentials. The 2006 Republican countywide turnout was 138,182, of which almost 100,000 were cast in the suburbs. Keats is favored. But Garrido won’t fade away. If he loses to Keats, he’s poised to run for 45th Ward alderman in 2011.

The bottom line: To win countywide, a Republican needs massive support from white liberals and independents, plus white conservative Daley Democrats, all of whom detest Stroger. But if Democrats nominate O’Brien or Preckwinkle, Republicans can kiss the race goodbye.
Russ Stewart is a political analyst for The Chicago Daily Observer.

image various Montana Cinches

One Comment »

  • Sports Fan said:

    I hope that his daughter, Toni takes over his dad’s board of review seat. That way we in the 39nd legislative district might get someone who is awake to represent us in Springfield.

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