RFMA works to harness runaway property taxes 

By Jean Lachowicz 

What can a business do when it has been at the same location for four decades and the property tax suddenly is increased 300% in one year? The business might hire a lawyer to file an appeal and hope for the best; it may have to increase its prices substantially to generate revenue while cutting expenses; or it could decide simply to call it quits.

            The new Property Tax Reform Committee of the Randolph Fulton Market Association (RFMA) is discussing all those scenarios in great detail. The committee kicked off its efforts with its first meeting Aug. 14 at LaLuce Restaurant on Lake Street.

“This is a very complicated and sensitive issue, and the committee will be a working committee to make recommendations to the RFMA board of directors, said Roger Romanelli, RFMA executive director.

            Committee members met with Dana Marberry, community relations manager of the Cook County Assessor’s Office, who offered a presentation on the assessment process and various methods of appealing a tax assessment. The first step is working with the Cook County Assessor and/or Cook County Board of Review. After that, businesses can approach the Property Tax Appeal Board, Circuit Count, Illinois Department of Revenue, Cook County Clerk, and Cook County Treasurer.

            Marberry said the Assessor’s Office reassessed all Chicago properties, both residential and commercial, for 2006. Property tax bills reflecting the new assessments will be mailed approximately Oct. 1.

            Building owners, particularly on Randolph Street where substantial development has occurred, find that assessments vary widely and inexplicably. Many feel reluctant to go on record with concerns over their buildings’ assessments because they fear it will adversely effect their pending appeals.

            According to Romanelli, exploding development within RFMA’s service area has increased assessments as much as 200% to 300% in some cases, even for businesses that have not upgraded their buildings or operations substantially. RFMA members in the Planned Manufacturing District bounded by Ogden Avenue, Halsted Street, Washington Boulevard, and Hubbard Street saw increases of only 8% to 10%, however.

            “Even though the increase does not affect all members equally, we have common ground in our mutual interest of protecting the interests of the industrial and manufacturing businesses in the area,” Romanelli said.

            Jim Graziano of Graziano Foods on Randolph Street said, “One of the best things is that RFMA facilitates meetings so business owners can discuss these issues and meet with people from the Assessor’s Office. The assessment process seems so sporadic, with 100% to 300% increases or much smaller increases with no rhyme or reason as to why. It really opened my eyes.”

            He added, “With the way the property is assessed, it does not matter to the government whether your business is profitable or not. These increases make it hard to get ahead no matter how well you are doing.”

            Romanelli introduced two property tax reform initiatives the committee could consider recommending to the board of directors: A+ Illinois and TRAC (Tax Reform Action Committee).

A+ Illinois seeks to reform education quality and funding for all children in the state as well as human services and community programs for children and families. Its goals include capping property taxes in exchange for state income taxes so that a business or individual making more money pays more tax, while one making less pays less. Current property tax formulas are based on assessed value of property, not on ability to pay, which can create obstacles to economic development.

            TRAC advocates an acquisition-based assessment process tied directly to the actual purchase price of a property. It limits assessment increases to 2% until a property is sold, so it promotes stability by making property taxes predictable and enables property owners to remain in their neighborhoods for the long term.

            “There are groups and initiatives out there already to work on reforming the system,” said Romanelli. “A+ Illinois and TRAC are two of them. The Illinois General Assembly has recommended to the Governor a 7% [per year] property tax assessment cap for residential properties only. The Chicagoland Chamber of Commerce rejected the recommendation because it would shift the tax burden to commercial properties.”

            RFMA will coordinate a meeting on property tax appeals soon after area companies receive the next round of property tax bills.

            Also, on a related issue, RFMA will coordinate a Kinzie Industrial Corridor TIF Update meeting in October to discuss the June 2006 report that states the Kinzie TIF has accumulated approximately $30 million in property taxes. RFMA will ask the City to verify this amount and identify the infrastructure improvements that will be paid for through the TIF, such as the Morgan/Lake CTA station, diagonal parking, and street and sidewalk improvements.