Kadner: New tax bills spotlight local debt
By Phil Kadner firstname.lastname@example.org January 16, 2013 5:10PM
A Cook County tax bill in Orland Park. | Supplied photo
Updated: February 19, 2013 2:03PM
Cook County property tax bills to be mailed at the end of this month are likely to rile both taxpayers and local government officials.
The first installment 2012 tax bills will include not only the amount a homeowner owes but information on the debts of each taxing district he or she lives in; the gross operating budgets of those bodies; total pension liabilities; unfunded pension liabilities; and the percentage at which the pensions are funded.
“These first installment property tax bills used to be pretty much blank except for the amount to be paid,” Cook County Treasurer Maria Pappas said.
“We thought people ought to know where their property tax money is going. Since they pay their property taxes to the county, people think that’s who gets the money.
“The property tax money goes to as many as 10, 11, 12, 14 taxing bodies and they’re all running up debt.
“It’s like when the tax bill arrives in the mailbox every taxpayer is getting a bill for 14 credit cards.”
On the second installment property tax bill in the fall, Cook County has been printing information about the percentage each taxing body is responsible for, which is a relatively new innovation.
Pappas said this “is just an opportunity to put out more information so people can find out why they’re being taxed out of their homes.”
Pappas said a letter will be included with the tax bills explaining the information.
That’s not going to sit well with local government leaders who have complained in the past that Pappas is distributing financial information that is misleading.
“The financial information comes from them,” she said. “If they don’t like it, then give us other information.”
Pappas explained that by going to the treasurer’s website, taxpayers can access more detailed financial information from each of the local taxing bodies.
Pappas sent me a copy of my property tax bill via email to demonstrate what it looks like.
The number that stood out (after a fairly large increase in my property tax) was the $99.2 million debt of the village of Orland Park.
In addition, I noticed school districts seemed to have no pension liability.
“We tried to get the figures from the state but were told they don’t exist,” Pappas said. “Do you know why?”
Because the state is responsible for the suburban teachers’ pension fund, I replied.
“That’s right. We’re told no one can calculate what the pension debt of each school district is and that’s just absurd.”
I think rather than have a zero dollar figure in the pension liability category for school districts, the treasurer should consider using the letters N/A or the words “not available.”
The first installment tax bills (payment will be due March 1) are calculated based on 55 percent of the property tax bill in 2011.
In theory, the second installment should be 45 percent, but that never seems to be the case.
All of this stuff is made more confusing by the fact that Cook County is always a year behind in collecting the property tax, which is why this year’s bills are the first installment for 2012.
But back to local government officials and why they’re likely to be angry about the financial information contained in the property tax bills.
Orland Park Mayor Dan McLaughlin in July wrote a letter to Pappas criticizing the way the information is portrayed.
Under the Cook County Debt Disclosure Ordinance, which was Pappas’ brainchild, the reporting procedures for local government are not broken down into short-term and long-term liabilities, distorting the size of the debt, McLaughlin contends.
“In addition, talking about debt load without talking about assets and equity that back up that debt can be misleading. We feel a line should be added stating the community’s EAV (equalized assessed valuation). The village of Orland Park’s debt load is moderate as compared to the standard but may not appear to be moderate if a casual reader compares us to a municipality with a smaller debt load,” the mayor stated.
Given that the tax bills will be arriving in mailboxes two months before municipal and school board elections, I’m guessing the uproar among incumbent officials is going to be loud.
“I don’t care,” Pappas said. “My job is to inform the taxpayers.”
I told her that many taxpayers won’t bother to dig any deeper.
“That’s their job. We spent eight months putting together this computer program to provide the information on the bills and in more detail on our website. People can go to their governments and ask for more information.
“Stop worrying about what’s going on in Europe or the national debt and the state’s finances and find out what’s going on in your local government.
“Their debt keeps going up every year, and it is only going to get worse,” Pappas said. “We’re going to turn into a nation of renters because people can’t afford to stay in their homes. Parents who have paid off their mortgages can’t leave their homes to their children because their children can’t pay the property taxes.
“People need to go to the local government and say, ‘This has to stop. No more.’”
I think most people who want to be informed understand that in Cook County more than 60 percent of the property tax bill is usually from their school districts.
And that’s in large part because the state has refused for decades to do its fair share, so that Illinois now ranks dead last among the states in the percentage it contributes to fund public education.
By comparison, the village of Orland Park levy represents about
7 percent of a homeowner’s property tax bill and the suburb for years returned all, or a portion of, that money to homeowners.
Cook County, by the way, has
$6 billion in total debt according to the tax bill Pappas sent me.
“Most people tell me they like the information,” Pappas said. “They never realized any of this.
“I’m just educating the public.”