The equalization factor is a multiplier used to ensure that the total equalized value, or EAV, of real estate property in all Illinois counties equals 33 1/3 percent of the fair market value. This process is known as inter-county equalization. Each county is assigned its own equalization factor. In Cook County, the final equalization factor for the 2017 property assessment year (for taxes that are due in 2018) is 2.9627. The equalization factor does not cause taxes to go up or down.
Why Illinois Uses an Equalization Factor
To fairly implement certain state statutes, the State of Illinois Department of Revenue (IDOR) calculates an equalization factor for each county. The assessed valuation of property is used to calculate formulas for education, transportation and public assistance grants to local jurisdictions. Some state statutes limit property tax rates or bonded indebtedness to local governments, which relate to assessed value. These must be equalized for statutes to apply equally in counties throughout the state.
This is especially important in Cook County, which differs from the other 101 counties in Illinois in how it classifies and assesses different types of property, i.e., commercial, industrial and residential, at varying levels set in the county ordinance.
How Equalization Factor is Calculated
IDOR calculates the equalization factor for each county annually by looking at multi-year comparisons of property assessments and sales prices. It uses this assessment/sales ratio study to do some computations of a three-year adjusted average for the countywide median ratio, which is then weighted by class of property. This is the equalization factor.
After public hearings on the equalization factor, and after the Board of Review releases its final assessments for a given assessment year, the IDOR sends its certified equalization factor to the Cook County Clerk, which applies that factor to the final assessed values of properties. That value is called the equalized assessed value, or EAV.
That EAV for residential properties includes any of the exemption that homeowner qualifies for, such as the homestead exemption or senior exemption.
The 2017 equalization factor, which is 2.9627 in Cook County, will be applied to the second installment property tax bills for tax year 2017, which were due in August 2018.
To help taxpayers learn more about the equalization factor, Publication 136 from the Illinois Department of Revenue provides additional information.