March 19, 2021
The Civic Federation recently released its annual Effective Property Tax Rates report, which examines two- and ten-year trends in estimated effective tax rates for residential, commercial and industrial property in selected northeastern Illinois communities.
The report highlights that in the ten-year period between tax years 2009 and 2018, the effective tax rate for residential and commercial property increased in all of the selected municipalities in Cook County, except residential property in Arlington Heights, Schaumburg and Elk Grove Village. There were not enough sales of industrial property in tax year 2009 across all of Cook County and in 2018 there were only enough sales in the North Triad to calculate an effective tax rate.
In the collar counties the effective tax rate for all types of property increased for the majority of the selected municipalities over the ten-year period examined. However, six municipalities in the collar counties saw a reduction in their effective tax rate. This blog will specifically look at the ten-year trend for residential property in Cook County.
An effective property tax rate is an estimate of the percentage of a property’s full market value owed in property taxes during a given tax year. It offers a method of comparing property tax burdens across municipalities and counties. For example, the report shows that in 2018 the estimated effective property tax rate for property owners in a selected tax code in Glenview in Cook County was 2.00%. More simply stated, in 2018 a residential property owner in that particular tax code in Glenview with a property worth $200,000 would have an estimated property tax bill of $4,000 excluding any exemptions .
The table and map below show the percent change in effective property tax rates for residential property in the ten-year period between tax years 2009 and 2018 for selected communities in Cook County. Over this time period, the majority of the selected Cook County communities experienced increases in the effective property tax rate for residential property, with the exception of Arlington Heights, Schaumburg and Elk Grove Village, which experienced declines in their effective tax rate for residential property. Two of the three south suburban communities studied—Harvey and Chicago Heights—experienced the most dramatic increases in their effective tax rate for residential property during this period, with increases of 29.6% and 40.0%, respectively, due in large part to a shrinking tax base in both communities. The City of Chicago saw the third largest increase in its effective tax rate over the ten-year period examined, growing by 21.2% primarily due to an overall increase in the actual composite tax rate. The 7.0% decline in Arlington Heights’ residential effective tax rate is primarily due to a reduction in the median level of assessment and equalization factor between 2009 and 2018, whose impact was larger than a 50% increase in the local composite tax rate.
While estimated effective property tax rates cannot be used to accurately determine the precise tax burden on specific properties, they are useful for providing an apples-to-apples comparison of average property tax burdens in different areas over time. To take the most extreme example from the table above, a residential property owner with a home worth $150,000 in a selected tax code in Chicago Heights with a 3.84% effective property tax rate would pay an estimated $5,760 in property taxes in tax year 2009 without exemptions. In tax year 2018, the same home in Chicago Heights worth $150,000 would owe an estimated $8,070 in property taxes if they were not eligible for exemptions. In the ten-year period from tax year 2009 to tax year 2018, the effective property tax rate for residential property in Chicago Heights increased 40.0%, from 3.84% to 5.38%.
Change in effective tax rates over time is due to changing actual composite tax rates, changing median levels of assessment, or both. In Cook County, effective tax rates can be affected by changes in the Cook County equalization factor as well .
In the case of Chicago Heights, all three factors contributed, but a significant increase in the actual composite tax rate drove the increase in the effective tax rate. The actual composite property tax rate in Chicago Heights increased from 11.128% in 2009 to 19.485% in 2018, again due in large part to a falling property tax base. Over the same time period, the median level of assessment as calculated by the Illinois Department of Revenue decreased from 10.25% in 2009 to 9.49% in 2018 for residential properties and the equalization factor fell from 3.37 to 2.91, but the impact of these changes were not enough to offset the significant increase in local composite property tax rates .
 Property tax exemptions available to eligible homeowners reduce the taxable value of their property.
 The collar counties’ equalization factors do not generally change significantly from year to year because they do not set different property tax assessment levels for different types of property. Cook County is the only county in Illinois that uses differential assessment, also known as classification.
 2018 Information provided by the Illinois Department of Revenue and information contained in Assessment Level Ratios from previous years, available at https://www2.illinois.gov/rev/research/taxstats/PropertyTaxStatistics/Pages/default.aspx