Is the Cook County Property Tax Assessment System Fair?

Cook County Board of Commissioners Finance Committee Hearing - July 18, 2017

Purpose: To discuss the alleged unfairness in the Cook County Property Tax Assessment System - an issue recently raised in a series of articles in the Chicago Tribune. 

County Assessor Berrios and five senior professionals from his staff testified in front of the Cook County Board of Commissioners. Also supplying testimony were Christopher Berry from the University of Chicago, Robert Weissburg, and seven spokespersons representing various community groups from low income neighborhoods within the city of Chicago. 

Assessor's Office Testimony:
Assessor Berrios and his staff testified regarding the methodology used to determine real estate assessments. The following points were made:

• 1.84 million pieces of property are assessed; there is no perfect assessment model.  
• $22.5 million has been recovered from exemptions that were made in error.
• 14% of homeowners file appeals; 7-9%  had their taxes reduced.
• The appeal process is free, open and accessible with no need for an attorney. There have been 211 community outreach events a year to coach citizens on how to appeal.
• The private study used in the Tribune article was flawed; the press coverage was unfair.
• Over a million evaluations are done utilizing 35 variables. A software package uses data to predict the value of a home.
• The focus is on fairness and uniformity of assessments.
• The Probit model (created from a $300,000 grant from the MacArthur Foundation) was found to have serious flaws. A purely mathematical approach is not reliable. Therefore, the office uses software initially, but then goes back through with a “hand check” to look for anomalies. 

Initially, the assessor’s office agreed to use the Probit model developed by the MacArthur grant. However, they became dissatisfied with the results and stopped using the model. However, they did not notify the Cook County Board and President of the change. When questioned as to why they did not disclose this to the Board, they responded that the MacArthur Foundation paid for the Probit development, not Cook County.

Those testifying for the assessor’s office emphasized their high degree of professionalism and their dedication to do whatever they could to be fair and uniform in their assessments. Assessor Berrios called for an independent body to be created  to examine their practices and to recommend changes that would improve the system. 

Other Expert Testimony:
Christopher Berry from the University of Chicago and Robert Weissburg, an expert in modeling, gave a different perspective.

• Berry stated that the tax system is neither fair nor accurate. Assessments are regressive, with lower priced homes being assessed at a higher rate than higher priced homes. Minority neighborhoods are consistently overassessed resulting in what amounts to institutional racism. Appeals do not remedy this regressivity. It is “taxation without explanation.” The “hand adjusted” method does not provide a transparent mode of assessiment. 
• Robert Weissburg also emphasized the fact that the system was highly regressive. In 2009 he served on the Foreclosure Commission that was formed at the height of the economic collapse. This is when the Probit model was developed. In 2015 the model was agreed to by the County assessor. However, in 2016, the Tribune found that the model was not being used. Neither the Cook County Board of Commissioners nor President Preckwinkle were apprised of this change.
• Weissburg cautioned that the continued use of the current system may well result in liability for damages. The Board needs to fix this quickly and transparently. “Hand checking” is too subject to manipulation.
• Public testimony emphasized the regressivity of the assessment process. Many low income homeowners lack the skills to work the system of appeals. Thus, it is the higher income property owners who benefit from the appeals process. The language barrier is yet another impediment to fair treatment. 

Following the testimony, Board commissioners asked clarifying questions and inquired as to when the independent group would be formed and ready to begin its analysis of the current system. There was no commitment as to the date that would happen.

Additional Finance Committee Business:
Cook County staff came back to the board for a change order to receive additional funds for the Measurement & Maintenance segment of a $60 million contract already approved by the Board.

• The Inspector General raised the issue of changing the scope of work after the work has been approved. 
• Several commissioners raised objections to this additional funding request.
  
• However, when the Cook County staff was questioned, they found that all of the staff members who negotiated the original contract had left the County’s employ, and many of the answers to commissioners’ questions left with them.
  
• Commissioners were obviously frustrated by this situation.
  
• Contracts that go 20 years into the future are problematical because of the great turnover in employees.
  

While there was significant resistance to providing the additional funds, commissioners finally did vote to approve, with the caveat that this flawed process needs to be avoided in the future.

Observer -  Georgia Gebhardt