Cook County homeowners, our property tax bills are one step closer to hitting our mailboxes. Why? Because the final Cook County 2021* State Equalization factor was announced on October 18, 2022.
So, what the heck is equalization?
It is a mathematical multiplier that works to create a fair distribution of state funding.
Assessed property valuations are used by the state to fund education, transportation, and public assistance grant programs state-wide. The equalization factor creates uniform property assessments across the state.
The factor changes annually. Now that we know the multiplier, the County can compute and mail out the second installment 2021 property tax bills.
Why is equalization important to Cook County and to Chicago?
Equalization helps ensure that Cook County gets its fair share of many state programs and revenue streams relative to other counties.
All 101 Illinois counties outside of Cook assess real estate at 33-1/3% of market value.
Cook County does not. Instead, it classifies (assesses) different types of property at varying assessment levels. For example, residential property is assessed at 10% of market value.
This effectively alters tax rates so commercial and industrial property owners shoulder more of the property tax load than homeowners.
The reasoning is that industrial and commercial owners can diffuse their tax loads by passing costs to tenants and consumers, or by building them into the cost of production. This, in theory, is fairer to homeowners who can't pass the costs to anyone.
This means that, without equalization, other counties would get as much as three times more State money on some programs than Cook would per assessed dollar.
Cook County needs equalization to compensate for lower assessment levels in order to get a fairer amount of those funds. So, state funds get divided among the counties based on their total equalized assessed values.
The equalization factor does not impact the amount of our property tax bills.
It does not cause the bills to go up or down. But it does impact how other state funds are divided.
To recap, assessed values determine our tax obligations relative to other Cook County property owners. Equalization helps assure that Cook County gets its fair share of many State programs and revenue streams relative to other counties.
For what it's worth, the 2021 equalizer factor will be 3.0027. The 2020 factor was 3.2234.
More info (if you like this sort of thing):
Read the state's press release here
In 2020, the 1.8 million (or so) tax parcels in Cook County had an overall equalized assessed value of $192,813,481,896. The collar counties $119,856,579,221, and the rest of the state $90,395,134,330.
For 2021, the County reassessed 882,207 tax parcels, with a total equalized assessed value of $47,020,000,000. In the last three years since the previous reassessment, Chicago's property assessments (property values overall?) increased 31%.
*Yes, 2021 (not 2022) because of arrears