June 13, 2019
AT A GLANCE
This report explores the history and repercussions of the significant accumulation of cases at the Illinois Property Tax Appeal Board (PTAB) and offers recommendations for improving operations at the Board.
The Property Tax Appeal Board (PTAB) is one of two property tax appeal options available to property owners and taxing districts after a county’s Board of Review. While PTAB plays an important role in ensuring justice for property owners, it remains obscure to both the public and to state officials. It has been underfunded and understaffed and has a significant accumulation of cases that stood at 62,077 at the end of State fiscal year 2018. While many reforms have been proposed by different stakeholders to improve operations at PTAB, not enough has been done to significantly reduce the backlog, delaying justice for taxpayers who have been incorrectly taxed and resulting in a large overhang of possible refunds for taxing bodies, which must be paid from current revenues.
The Civic Federation in 2015 requested and received data from PTAB and analyzed it to verify the source of the backlog was Cook County, as had been supposed by observers for many years, and also look at the breakdown of cases by type of property. The Federation determined that the backlog is indeed centered in Cook County and is related to the high volume of both residential and commercial and industrial appeals. The volume of appeals and size of the backlog from Cook County is larger than can just be accounted for by the fact that the county holds nearly one-third of the state’s 5.8 million parcels of property and 45% of its taxable value. Of the number of outstanding cases at PTAB as of the end of fiscal year 2018, 83.9% were from Cook County. Many of the largest counties in the state experienced a backlog in cases at PTAB after the nationwide crash in the property market in 2007-2008 precipitated an across-the-board increase in appeals. However, Cook County still has a more substantial backlog of cases outstanding for both residential and commercial and industrial properties.
The Federation also requested information from the Cook County Treasurer’s Office about trends in the number and amount of PTAB refunds paid to Cook County property owners. Reducing the backlog of cases at PTAB by increasing the rate at which cases are processed and resolved would increase the speed of justice for taxpayers, but could also result in an increase in the number of refunds that need to be made by governments out of current revenues and therefore could impact the budgets of the county’s schools, municipalities and community colleges. The data showed that both the number and total amount of refunds processed by the Treasurer’s Office have increased in the last several calendar years, reaching 38,035 refunds paid totaling $133,749,250 in 2017, the bulk of which were from six separate tax years. The following calendar year both the dollar amount and number of refunds paid declined by about 12% to $117,788,535 and 33,154. The median refund has remained fairly constant between calendar years 2003 and 2018 and the average refund has decreased. Since data for the most recent tax years through 2017 are incomplete, it is not possible to extrapolate with confidence from the data whether refunds will increase again or continue the decrease seen in 2018. It will depend on both the volume of appeals and the speed with which the cases are moved toward resolution.
The fact that taxing districts must pay refunds out of current revenues is not a reason to further delay justice for taxpayers who have been incorrectly taxed, but it is a reason to proceed with measures to reduce the backlog in an orderly and transparent manner.
Civic Federation Recommendations
The Civic Federation offers recommendations to improve PTAB’s workflow and enable it to reduce and eventually eliminate the backlog of cases, some of which could be implemented through rule changes and some of which would require budgetary or legislative changes.
The proposed rule changes were developed by an ad hoc committee of the Illinois State Bar Association in 2013 and supported by the Civic Federation, Taxpayers’ Federation of Illinois and the Illinois Chamber of Commerce. While PTAB has made some progress in implementing changes, the recommendations still include:
- Case management for the largest cases;
- Expediting motions for extensions of time;
- Simplifying decision documentation procedures for residential properties; and
- Empowering Administrative Law Judges to actively move motions and cases to disposition.
If additional commonsense procedural and rule changes are first implemented, the Civic Federation could support an increase to the Property Tax Appeal Board’s budget. However, such an increase would have to be accompanied by a multi-year plan to reduce the Cook County case backlog and prevent it from growing in the future.
The Illinois General Assembly should additionally expand the types of data on cases that PTAB is required to report in its statutorily required Annual Report (35 ILCS 200/16-190) to include information about residential cases, smaller commercial and industrial cases and narrative and analysis of all the data in order to assist the reader in evaluating the meaning of the report. This would improve transparency and provide additional information to the public about PTAB’s activities.