Property Taxes and the Value of Your Home

Real estate taxes have been a sore subject for many people in our community lately.  I find that there are several common misunderstandings about our property taxes among the general public.  The biggest confusion lately is about the relationship between the tax bill and the value of our homes.  People are frustrated that their tax burden seems to be increasing while their home values continue to decline.

So in my first article about property taxes I am going to answer this question:

“Why have my real estate taxes gone up while the value of my house has gone down?” 

First of all, it is important to understand that our real estate taxes are used to cover the budgets of several different government entities that provide services to the community.  Some of the specific items will vary by community.  For an example, here are the taxing bodies listed on my tax bill for Highland Park, which is in Lake County:

• Lake County
• City of Highland Park
• Park District of Highland Park
• Moraine Township
• Highland Park library
• Mosquito abatement
• School districts (we have two districts, one for K – 12 and another for the high school)
• College of Lake County
• North Shore Sanitary District
• Forest Preserve
• East Skokie Drainage
• Pension programs for Lake County, Highland Park, the Park District of Highland Park, the school districts, and the Forest Preserve

Now just because we are all in a situation where our home values are declining, does not mean that all of the above taxing bodies can operate with less money.  Our housing values have declined dramatically over the past 5 – 6 years.  Although there is pressure on all of these government organizations to tighten their belts and lower costs, at the end of the day, their budget cuts are not at the same rate as our declining home values – nor is there any reason for this to occur.  There is no relationship between home values and these budgets.  Similarly, when our home values were rising, the taxes didn’t necessarily increase at the same rates as our value.

The only reason that the tax assessor looks at our property values at all is so that they can determine each homeowner’s fair share of the total tax burden.  The actual value of the property, up or down, has no relation to the budgets for these taxing districts.  It is just a method that township assessors use, as specified by Illinois statute, to figure out each homeowner’s portion of the property tax “pie.”

Hope this is helpful.  In my next post I plan to write about the upcoming quadrennial reassessment and why the assessed value of your home will probably be higher than today’s value in the real estate market.

Thank you for reading!

Nancy S. Karp

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