City services are funded in a variety of ways, but two of the largest sources of income are property taxes and tax revenue from the businesses operating there. COVID-19 decreased the revenue provided from businesses impacting by the pandemic, so property owners are left wondering: How will this impact my property taxes?
Budgets Rely on Tax Dollars
Between businesses closing their doors and sales sliding down because of COVID restrictions, there will be less tax liability shouldered by those local businesses. This will increase the chances of property tax hikes. According to the International Council of Shopping Centers, malls and shopping centers usually provide about $400 billion in local tax revenue each year. The hole created by that lost revenue will need to be made up somewhere.
In addition, because of the low mortgage rates and limited inventory caused by the pandemic, home values are higher. That could cause reassessment values to be higher in the Cook County properties being assessed this year.
Cook County Mayor Lori Lightfoot has put forth a budget that cuts $200 million in 2021 by reducing the city’s workforce through furloughs and layoffs. She has also talked about tapping surplus Tax Increment Financing Funds, or TIFs, this year. However, the new budget included a property tax hike and a provision to raise property taxes annually by an amount tied to the consumer price index.
The two most important ways property owners can ensure that the property taxes they’re paying are not paying higher property taxes than they should is to first, double-check and make sure they’re taking advantage of all exemptions. For instance, seniors who are older than 65 can lower the assessed rate value by $8,000. Homeowners can file a Homeowners Exemption that covers their primary residence, which could reduce the assessed value by up to $10,000.
Commercial property owners also have a list of exemptions available to them based on criteria such as what it’s being used for or whether it’s new construction.
The second thing property owners can do to ensure they’re not paying too much in property taxes is appeal the assessments if they deem them incorrect or too high. Property owners should be aware that appeals are only available within a certain timeframe based on the town’s turn on the calendar, so it’s important to check the Cook County Assessor’s website for those deadlines.