The longer Preckwinkle remains in office, the harder she squeezes taxpayers
Given the regressivity of property taxes and Cook County government’s overreliance on them, it is fair to say property taxes are a delicate issue for Chicago residents. With billions in federal COVID money squandered and CPS schools’ insatiable appetite for an ever-increasing share of taxes growing exponentially, the burden of property taxes falling on residents, in particular middle-income families, and the poor, will worsen. Illinois residents surveyed in a recent poll cited taxes as the biggest reason for state and local population loss, with almost 50 percent of current residents saying they would leave the state if they could.
In Cook County, it is not simply the weight of overall taxes that is punishing residents, but it is also the confusion and unfairness of the whole system. Taxpayer anger is growing. Meanwhile, Cook County’s political power brokers are playing the blame game and are scrambling to do damage control with property tax relief measures. The gamesmanship is reflected in the finger pointing between County Board President Toni Preckwinkle and Cook County Assessor Fritz Kaegi over property tax billings and in the most recent efforts by the county to provide targeted relief for residents.
The recent disagreement between Toni Preckwinkle and Fritz Kaegi centers around delayed property tax billings and whose office is to blame for these delays. Preckwinkle blames Kaegi's office for missing deadlines related to assessments. Kaegi's office, in turn, is placing blame squarely on Cook County's choice of Tyler Technologies as a vendor, claiming it led to technical difficulties. The conflict also stems from a report that found errors in property assessments.
This public feud between Preckwinkle and Kaegi comes at the same moment the Chicago Tribune published a story revealing a long delayed, glitch-ridden computer overhaul of the county’s broken property tax system. An overhaul that began with an initial contract awarded to Texas-based Tyler Technologies Inc., the contracts followed a history of political contributions dating back over two decades, including $25,000 in donations to various Cook County officials overseeing modernization efforts, according to the Tribune investigation.
The original cost estimate for upgrades to the tax system was $78 million, but is now estimated to cost taxpayers $185 million. The cost is expected to continue to grow. Complicating matters, the Tribune reported long delays have resulted in the county spending another $80 million on the upkeep to the old mainframe and to “watchdog” the troubled Tyler Technologies contract, bringing the total taxpayer cost so far to $265 million for all three politically connected deals.
Meanwhile, what has come of Preckwinkle’s 2024 announcement that she was to fix the broken Cook County's property assessment system that has seen homeowner property taxes rise at 10 times the rate of their property values? It should not be forgotten that Preckwinkle waited until her 14th year as County Board President to make that commitment and only pledged to fixing the system after Fritz Kaegi replaced Preckwinkle's close associate, the ethically challenged Joe Berrios, as assessor.
What has come of the study that calls for government agencies involved in the Cook County property tax system to better collaborate to help the system become more fair and equitable, as a growing chorus of homeowners complain they are struggling to pay skyrocketing bills? These two key county agencies help determine the fate of how much commercial property owners pay in taxes, and how that burden shifts to struggling homeowners.
Meanwhile, Preckwinkle’s chief ally and her Cook County Democratic Party Co-Chair Robert Martwick continues to profit as a Cook County property tax appeals lawyer in the lucrative business of appealing the Assessor’s valuations of his clients. Martwick has opposed all efforts to reform a fractured property tax appeals system that is virtually impossible for working families to navigate and requires many businesses to put law firms such as Martwick’s on permanent retainer as assessment reductions must be renewed annually, even between reassessments.
With County elections approaching, Preckwinkle is preparing to give over 13,600 homeowners a one-time $1,000 check in property tax relief. A politically-timed stunt, this $15 million give-away leaves over 1.1 million homeowners and renters left out. Incidentally, Preckwinkle paid $1.4 million to another politically connected vendor, in poor standing with the state, to run the $15 million property rebate program. The property tax relief grant initiative is equivalent to Preckwinkle’s guaranteed income program.
Enacted in 2022, Preckwinkle boasted the “Cook County Promise Guaranteed Income Pilot” was the largest publicly funded, guaranteed income program in the nation. Spending $42 million in federal funding provided by the American Rescue Plan Act (ARPA), the two-year pilot provided monthly, no-strings-attached payments of $500 to 3,250 households. For a little perspective, 748,776 of Cook County's 2.1 million households are struggling financially.
It is important to note that the property tax relief grant draws from the $100 million in interest fees generated from late property tax payments this year, significantly higher than the $35 million budgeted. Why would Cook County not use the $65 million non-budgeted income for more tax relief? As perplexing as the decision to keep $65 million on hand when it could be returned to struggling taxpayers, the same could be said over the hundreds of millions of dollars in Tax Increment Financing (TIF) property surplus revenues, which is nothing short of swindling taxpayers. That’s scandalous.
Any even bigger scandal is the TIF surplus. Chicago taxpayers have been told for years that the TIF program diverts money from taxing bodies such as schools when, as a matter of fact, TIFs are a vehicle for providing taxing districts with even more property tax revenues. This is because when property taxes are diverted to TIFs the taxing rates of the individual taxing districts rise higher to meet their levy requests. Not only do they not lose money but they then share in the annual TIF property tax surplus, which could have been returned to the taxpayer.
TIFs in effect are back door property tax increases. Local districts benefit enormously from the property tax windfalls emanating from the annual TIF surplus. In 2025 local governments will receive an additional $570 million in property revenues from the TIF surplus. The city will rake in $132 million while Chicago public schools will receive almost $300 million. Since 2019, the schools have received an additional $1.3 billion in TIF property tax surpluses on top of their annual levy increases which they have raised to the max. This is a massive windfall at taxpayer expense, not a replacement for diverted revenues.
Cook County property taxes are spinning out of control as the property tax burden is only magnified by the unfairness of the assessment process and the unpredictability of the system. Local governments reap the benefits of what amounts to TIF back door property tax increases, while the property tax appeals industry which has included many public office holders in political leadership like Senator Robert Martwick, profit from the intentionally confusing and archaic tax appeals system.
Toni Preckwinkle has served for 15 years as County Board President and seven years as Democratic Party Boss and has taken no steps to enact constructive changes to this system. Senator Martwick, too, who has been in legislative leadership for well over a decade has done little to reform and simplify this convoluted system. When will voters hold both Preckwinkle and Martwick accountable? They will soon have their chance.
