To subscribe to Capitol Fax, click here. A make-work program for property tax appeals lawyers? Friday, Dec 15, 2017 * From ProPublica Illinois’ explanation of how it did its deep-dive into Cook County’s property tax appeals process… The analysis shows a large percentage of first-pass reassessments under Berrios remained the same over multiple reassessment periods. For example, 51 percent of the approximately 40,000 PINs in the analysis had the same first-pass value for the 2012 reassessment as the 2009 reassessment. For the 2015 reassessment, 39 percent of first-pass values were identical to the 2012 reassessment. Twenty-three percent of first-pass values were the same for all three reassessment periods. By comparison, just 1 percent of first-pass values for the 2003, 2006 and 2009 reassessments conducted under Houlihan stayed the same from one reassessment to the next. In cases when the first-pass values didn’t change, many of the property owners filed appeals and won reductions that lowered their tax bill – only to see the value snap right back to the same first-pass value during the next reassessment. [Emphasis added.] * I asked ProPublica for the numbers behind its “many of the property owners filed appeals and won reductions” line and here’s what they sent.. Of the parcels that saw no change in assessment, 77 percent had appeals filed on them. Of the ones that had appeals filed on them, 74 percent won a reduction, only to have the value snap back to the same number. Why would so many of those property values snap right back to the previous values? Could this be some sort of deliberate make-work scheme for tax appeals attorneys, who often make money based on the amount they successfully reduce assessments on appeal and who then contribute to Assessor Berrios’ campaign committee? In other words: Lawyer gets client’s property value reduced on appeal, lawyer gets cut from client, lawyer makes Berrios contribution; assessor’s office assigns pre-appeal value during the next round of assessments, lawyer again gets client’s value reduced on appeal, lawyer again gets cut from client, lawyer again makes Berrios contribution; assessor’s office again assigns pre-appeal value during the next round, and etc. ad infinitum. * The assessor’s office sent me a long reply that pointed out what it claimed were some real problems with the ProPublica/Tribune story. The reply (click here) did not fully answer my question, however, so I sent them this… OK, but I don’t see anything in your response that addresses why a property that was assessed at a certain level and then had the value lowered on appeal would then have the valuation snap back to the old level again at the reassessment. I’ll also point out this statement from the Trib story: - “There is no rationale for having no change in these initial valuations,” said Richard Almy, former executive director of the International Association of Assessing Officers. “Especially if the assessor later agreed to a reduction, there’s no earthly reason for them to go back to the same value.” * The assessor’s reply… That is incorrect. Among the “earthly” reasons would be if the reduction-on-appeal were based on new data about revenue of an income-generating commercial building. Again, valuation of income-generating commercial buildings is done based on numerous factors, and revenue is tremendously important in the income-approach-to-value method of assessment used in for commercial buildings in Cook County. We should never assume the revenue figures are the same for the next triennial, sometimes not even for the next single-year period. Therefore, a reduction-on-appeal may not be the fairest figure the next time around. In many of those cases, we consider the original (pre-appeal) number to once again be a reasonable starting point. Still other reasons for returning to the former number as a reasonable starting point are: · Turnover of previously below-market leases, resulting in increases built into the new leases (more revenue)

· Past reduction was based on the loss of a major tenant and revenue. That loss has since been made up and revenue is higher than in the period which had resulted in the return to the former Assessor First-Pass number.

· Improving market conditions

· New triennial change in the underlying land value

· Prior damage now repaired

· New construction/added square feet making up for the reduction in value that was granted on appeal, thus raising the former lower-by-appeal number back to the original Assessor First-Pass figure - Posted by Rich Miller

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