Cook County’s property tax system is fundamentally flawed. It perpetuates the gap in resources between north and south, rich and poor. A homeowner in impoverished Ford Heights pays based on a property tax rate that’s almost five times higher than a homeowner’s in Northfield.[…]
Here’s an example we pulled from Cook County tax records: A split level home in Ford Heights has a market value of $29,050. That home’s owner last year paid $2,345 in property taxes, equal to 8.1 percent of the home’s value.
At the same time, the owner of a split level home in Northfield with a market value of $720,980 paid $13,469 in property taxes, equal to 1.9 percent of the home’s value.
First let’s have a quick golf clap for the Tribune editorial board for showing that they can look things up on the Internet. Perhaps it’s a low bar to cross, but it’s one that tends to trip up Chicago newspapers. Well done on Googling, Trib!
Okay, now let’s get into their abysmal failure at math.
Yes, a town with low-valued properties is going to pay a higher tax rate than one with high-valued properties. Government costs a certain minimal amount of money regardless of property values or income. If property values are lower, you can’t just pay teachers fifty cents a day. So the property tax rate in poor areas is higher. It has to be, absent centralized collection and redistribution of property taxes.
So of course the richest area in suburban Cook County is going to have a much lower tax rate than the poorest. That’s a meaningless statement. The question is whether the suburban tax system has led to regional polarization. If the tax system is “broken” one would expect a high number of poor towns that pay a high rate, and rich towns that pay a low one.
So the questions the Trib should have asked are: How many towns pay an extremely low tax rate versus high? And how much does the tax rate vary across the county?
Fortunately, I went ahead and answered these questions, since apparently no one at the Trib knows basic statistics.
Let’s have a look, shall we?
There are 409 municipalities in suburban Cook County. Of these, the average tax rate on equalized assessed value (EAV) is 11.9 percent. A lower tax rate means the municipality is richer: since its properties have higher values, a lower rate is required to produce the necessary revenue. Similarly, a higher tax rate means the municipality is poorer: the rate rises to compensate for lower property values.
So how much do municipal rates vary from the average? This is called standard deviation. It turns out that the standard deviation for rates in suburban cook county is 4.09.
In simpler terms, the property tax rate in Cook County is 11.9 percent, give or take 4.09 percentage points.
Now you might think that 4.09 percentage points is a lot, you might not. But it’s nowhere near as large as the 23 point difference between Northfield and Ford Heights.
In fact, more towns in suburban Cook pay a lower rate than higher: of the total, 263 have a tax rate that is at least 2 points lower than the average, while only 103 pay one that is at least two points higher.
And the polarization that has the Trib fuming? It doesn’t exist. Here’s how the distribution plays out:
Yes, there are a small number of blighted towns in Cook County. And for what it’s worth, there are no astronomically rich towns. Most of them are just normal towns, with slightly above average property values.
Maybe the poorer areas need help. That’s a good conversation to have! I’m sure people living in Ford Heights would agree.
But this isn’t “a broken tax system.” It’s not “fundamentally flawed.”
The Chicago Tribune is just bad at math.
Twitter @ WillCaskey
Will Caskey, a contributor to The Illinois Observer, is an opposition researcher and partner at Stanford Caskey. A Louisiana native, Will lives in Chicago where he continues to express annoyance with the term “Chicago-style politics.”
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