10-07-09 New Business Classification System Could Be Devastating by Sandy Cruz

During a recent meeting of the Chicago Southland Chamber of Commerce Real Estate Banking Council Bill Sandrick from the Sandrick Law Firm LLC discussed the impact of the change in assessments for business owners; a bigger tax bill due to a change in classification on properties.

While the assessments may look almost identical, businesses will see a 15 percent or more property tax increase. Up until this year vacant land in Cook County was assessed at 22%, residential was assessed at 16% and commercial and industrial were assessed at 38% and 36%.

The Illinois Constitution gives counties with a population of 200,000 or more the ability to classify for purposes of taxation. Only Cook has exercised that privilege. Sandrick said the Constitution states that if you have a classification system there cannot be a differential of more than 2-1/2% between the lowest assessed class and the highest assessed class. The General Assembly requires fair cash value to be the basis for assessment and the assessed valuation must be 33% of the fair cash value except for Cook County which has its own system. The classification system is strictly the decision of the county board. The courts ruled that the total assessment in the county has to equal 33% of the total (fair) market value so you can have varying levels of assessment. Sandrick said the Cook County multiplier is an algebraic adjustment to ensure compliance with the 33-1/3% requirement. FMV x assessment x multiplier x tax rate = tax dollars needed.

The problem is that 2/3 of the assessment base in Cook County is residential. “If 2/3 of your tax base is assessed at 16%, you have a problem. The problem driving the changes is that the defacto assessment for residential in reality is 10% vs. the statutory requirement of 16%. The difference is made up in the multiplier. The undervaluation of Class 2 properties results in a higher multiplier,” Sandrick said. “One solution would be to slowly assess residential property back up to 16 percent to bring the multiplier down and ease the burden on commercial and industrial business owners and prevent the flight of business to Will County. The undervaluation is the biggest problem and that’s why the changes were enacted. Since 2002 the multiplier in Cook County has gone from 2.4689 to 2.9786 in 2008. That is a 21 percent increase. Even if your assessment hasn’t changed, your taxes went up 21 percent as a result of the multiplier going up.”

This is the reason why businesses are running like hell out of Cook County; Cook County is taxing their pants off.

In recognition of the problem Sandrick said the assessor’s office devised a way to eliminate the great disparity in classifications. The 2009 assessments are 10 percent for vacant land and 10% for Class 2 residential. Class 3 apartments will be at 16% in 2009, 13% in 2010 and 10% in 2011. Commercial and industrial will be at 25%.

“The state mandates all property must be assessed at 33% and now because there are five major classes and none of those assessment levels are 33% what will happen to the multiplier? If you choose to do nothing in about 13 months your taxes will jump” Sandrick said.

He explained that as a result of your level of assessment going from 36% to 25% and the assessor’s office making the transition from the assessor’s value which is typically lower, to real value this boosted the market value of your property. That is a 52% increase in market value for commercial property and 44% for industrial. “As tax attorneys we argue market value,” Sandrick said. “The assessor is pushing market values up while we all know that they are dropping.”

What should businesses do? Sandrick’s answer is appeal, appeal, appeal until you have exhausted all efforts. “I can’ stress enough that you have to appeal in 2009. You have to attack the market value,” Sandrick said. Market value can be appealed through the Cook County Assessor’s office and then through the Cook County Board of Appeals and Circuit Court.

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”

 Jean Baptiste Colbert (from the Sandrick Law Firm LLC website.)

Don't get plucked.

Ex-alderman Robert Shaw throws hat in for Cook County assessor (Sun Times)

One of Chicago's most controversial and entertaining former aldermen, Bob Shaw, said Thursday that at age 71 he is ready to jump back into the limelight.

Shaw, who served 20 years as an alderman and eight years on the County Board of Review before being voted out of office five years ago, is running for Cook County assessor.

Ironically, Shaw's opponent is his former ally Joe Berrios. For eight years, Shaw and Berrios were the two Democrats on the three-member Cook County Board of Review.

They voted, in many cases, to lower the tax assessments on properties that Assessor Jim Houlihan had set. Now that Houlihan is retiring, both men are seeking the job setting the assessments at the front end.

And both men are taking shots at each other:

"The big hot-shot lawyers are the ones who got the tax breaks," Shaw said of Berrios' approach on the Board of Review.

Asked if he didn't sign off on all those tax breaks for hot-shot lawyers as Berrios' ally on the board, Shaw said, "I did not sign off on every tax break."

In fact, the record shows that sometimes Shaw did dissent from the decisions of Berrios and the board's late Republican commissioner Maureen Murphy, to lower the tax rates for big downtown properties represented by clouted law firms, such as those of Illinois Democratic Party Chairman Mike Madigan and Ald. Edward M. Burke (14th).

This corruption is out in the open, yet...what consequences to they face for having done this? Republicans and democrats are at fault here.

But in most cases, Shaw and Berrios voted together.

"When he makes comments about lawyers donating money, he might want to look at his old D-2s [campaign contribution disclosure statements] because when he was at the board and had his fund-raisers, the people contributing to him are the same people he's beating up right now," Berrios said.

Shaw also took a shot at Berrios over his role as a successful lobbyist for the video poker industry, convincing Madigan and other Springfield legislators to pass a massive expansion on gaming in Illinois in this most recent session.

"My opponent, we call him the 'Video King,' the 'Poker King.' What I'm asking him today, because of his run for this office, is to withdraw and resign immediately as a lobbyist for the video people of Illinois," Shaw said.

Berrios defended his advocacy for video gaming by noting the tax money the state will bring in will help pay for roads and create jobs. He said he was only one of five lobbyists the industry hired to get the bill passed.

Shaw noted the Cook County state's attorney's office is investigating whether Berrios improperly lowered the tax rates for some businesses represented by a former Berrios aide and state Rep. Paul Froelich.

"Where there's smoke, there's fire," Shaw said.

Berrios said he is confident the investigation will show he did nothing improper.

So Berrios is running while under investigation for having lowered the tax rates for cronies on downtown properties. This should be highlighted; but who is investigating him - one of the Madigans?

Shaw faces a daunting task going up against Berrios, who is chairman of the Cook County Democratic Party and has a $3 million war chest. Berrios' fellow committeemen just endorsed him over Shaw this month.

You can see why they would endorse him; he's a part of Chicago politics as usual; they'll get their paybacks soon enough.

Poking fun at the way the lights went out in his conference room at the South Loop Hotel just as he was about to launch his campaign -- they were ought for about 16 minutes -- Shaw said he brought light and transparency to the Board of Review, pushing to have meetings in the neighborhood educating homeowners about their rights to appeal their tax assessments.

I wonder if he has ties to ACORN. And indication of that is 'educating homeowners about their rights to appeal their tax assessments' - and this:

Shaw was quotable enough to make the news often, pouring rhetorical gasoline on racial arguments in the Council.

"A white should not be mayor. When they were mayor, they did not treat blacks and other minorities fairly. They don't know how to be fair," Shaw told the Chicago Defender in 1988.

I suppose "fairness" to this guy means black folks don't have to pay the same as everyone else. There is an unending entitlement mentality here based on race, and it is shamefully ACORN-esque.

Most of the Democrat candidates for Cook County positions have been given money by ACORN/SEIU:

For countywide office, the Democratic Party slated: Joseph Berrios, Assessor; David Orr ($24,500), County Clerk; Tom Dart ($57,338), Sheriff, and Maria Pappas, Treasurer. For the Metropolitan Water Reclamation District the party slated Michael Alvarez, Barbara McGowan ($500) and Mariyanna Spyropolous.

But this is also happening on the Republican side; it's both sides that are getting funding from ACORN, the SEIU and AFSCME.

The tax assessments issue has been going on for a long time and is something my great grandfather fought against back in the 1920's. The powers that be didn't appreciate it very much, so they went after him. There needs to be some fairness brought to the Cook County system - but it won't happen under either one of these clowns.

Well...they need to get the money they've already blown from somewhere.

Driver's license renewal fees to rise -WGN Chicago Breaking News

SPRINGFIELD -- For more than 25 years, it has cost Illinoisans 10 dollars to renew their driver's licenses. That is about to change.

On Oct. 11, the cost of renewing a standard Illinois driver's license jumps from the $10 in effect since 1983 to $30.

The hike in the renewal fee came as lawmakers and Gov. Pat Quinn raised a number of taxes and fees in order to pay for a $30 billion program to build roads, schools and bridges.

Quinn and lawmakers touted the construction plan for its potential to generate jobs during the recession. However, Secretary of State Jesse White says he doesn't want to be blamed for the fee increases as drivers pour into his offices.

White is seeking re-election to his post.

-- Associated Press

So this is Quinn's version of "stimulus" for the State of Illinois, I take it. Build the infrastructure with tax dollars ripped off from working people. Nobody wants to be "blamed" for these increases...yet the only people that bear the responsibility are the ones who are in office making these foolish decisions. Unless, of course, you want to blame Bush.