Report
of the Committee on Finance
The
Honorable,
The Board
of Commissioners of
Attendance
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Present: |
Chairman Daley, Vice Chairman Sims, Commissioners Beavers,
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Absent: |
Commissioners Collins, Quigley and Steele (3) |
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Also
Present: |
Honorable James M. Houlihan – Assessor of Cook County; Myer
Blank – Executive Director, Chicago Tax Assistance Center; Patrick T. Driscoll,
Jr. – Deputy State’s Attorney, Chief, Civil Actions Bureau |
Ladies and
Gentlemen:
Your Committee
on Finance of the Board of Commissioners of Cook County met pursuant to notice
on
Your Committee
has considered, for information purposes only, the following item and upon
adoption of this report, the recommendation is as follows:
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297144 |
ORDINANCE TO ESTABLISH A The following is a synopsis of the Proposed Ordinance: PROPOSED ORDINANCE AN ORDINANCE TO ESTABLISH A CIRCUIT BREAKER PROGRAM BE IT ORDAINED, by the Cook County Board of Commissioners that Chapter 74
Taxation, Article II, Division 1, Section 74-45 of the Cook County Code is
hereby enacted as follows: DIVISION 1. GENERALLY Sec. 74-45. (a) Definitions (c) Claimant Eligibility Qualifications (d) Grant Amount (e) Administration of the (f) Funding of the * Referred to the
Committee on Finance on |
SUBSTITUTE
ORDINANCE FOR COMMUNICATION NO. 297144
Sponsored by
THE HONORABLE FORREST CLAYPOOL AND
LARRY SUFFREDIN,
AN ORDINANCE TO
ESTABLISH
A
WHEREAS, there is an over reliance on real
estate property tax as a means of revenue generation in
WHEREAS, families in Cook County are
overburdened with high real estate property taxes in a time when national and
local economic conditions have deteriorated, and incomes are uncertain; and
WHEREAS, low and moderate income
homeowners, as well as homeowners who lose part or all of their income, can
quickly become overburdened by real estate property taxes if levies or home
values rapidly increase and annual
assessment adjustments to reflect declining market conditions are not possible;
and
WHEREAS, for all homeowners except seniors
with very low incomes, real estate property taxes are unrelated to a property
owner’s ability to pay; and
WHEREAS, the Illinois Circuit Breaker
Program does not adequately address the needs of Cook County Homeowners; and
WHEREAS, a Cook County Property Tax Circuit
Breaker would prevent real estate property taxes from overloading a family’s
budget by limiting the real estate property tax to five percent (5%) of a
family’s income up to a maximum benefit of $700; and
WHEREAS, for municipalities with real
estate property tax rates below one hundred fifty percent (150%) of the median
Cook County real estate property tax rate, the Cook County Board of
Commissioners desires such municipalities to join in its efforts to ensure that
families residing in such municipalities are not overburdened by real estate
property taxes by giving these municipalities the option to contribute to a
circuit breaker fund and provide their residents real estate property tax
relief; and
WHEREAS, for municipalities with tax rates
at or above one hundred fifty percent (150%) of the median Cook County real
property estate tax rate, the Board of Commissioners recognizes the inability
of such municipalities to contribute to a circuit breaker fund and desires to
provide the residents of such municipalities real estate property tax relief
with out contribution from such municipalities; and
WHEREAS, the Cook County Board of
Commissioners desires to enact a Cook County Circuit Breaker program to provide
real estate property tax relief to low and moderate income households in Cook
County.
BE IT ORDAINED, by the Cook County Board of
Commissioners, that Chapter __, Article __, Division __, Section ____ of the
Cook County Code is hereby enacted as follows:
Sec. _______
(a) Definitions. The following terms used in this Ordinance
shall have the meanings as set forth below:
“Administrator” means the Cook County Assessor’s Office.
“Claimant” means an individual who
makes application to the Administrator for a Grant regarding a claim year under
this Ordinance.
“Claim Year”
means the real estate property tax year for which Claimant seeks a Grant.
“Class 2 Real Property” means residential properties
as defined in Section 74-63(2) of the Cook County Code of Ordinances.
“County”
means the
“Non-contributing Municipality” means any municipality in the
County containing real estate having a real estate tax rate at or above one
hundred fifty percent (150%) of the Median County Property Tax Rate in the
claim year and has elected to
participate in the Program through ordinance enacted after the effective date
of this Ordinance.
“Fund” means
those monies collected from the State, County or any other entity and
Participating Municipalities
“Grant”
means an amount of money representing a reduction to a qualifying residence’s
real estate property taxes for a given claim year, as determined under this
Ordinance.
“Household” means a
claimant, the spouse of the claimant, and all persons using the qualifying
residence as their principal place of residence during the claim year.
“Household Income” means
the aggregate annual income of the members of the household in the claim year.
“Income” has the same meaning as
provided by Illinois Statute in Section 3.07 of the Senior Citizens and
Disabled Persons Property Tax Relief and Pharmaceutical Assistance Act, 320
ILCS 25/3.07, except that “income” does not include veteran's benefits.
“Median County Property Tax Rate” means the median real estate property tax rate as
calculated by the Administrator using the cumulative real estate
property tax rate for all of Cook County for the claim year.
“Contributing Municipality” means any municipality in the
County containing real estate having a real estate property tax rate that is
less than one hundred fifty percent (150%) of the Median County Property Tax
Rate in the claim year and has elected to participate in the Program through
ordinance enacted after the effective date of this Ordinance.
“Ordinance”
means the Cook County Circuit Breaker Program Ordinance.
“Participating Municipality” means any Non-contributing
Municipality or any Contributing Municipality.
“Program” means
the property tax relief provided for under this Ordinance.
“Property Taxes Accrued” means the ad valorem real estate property taxes extended against a residence
payable or paid by a claimant for the claim year, excluding special assessments, back taxes,
omitted assessments, interest, or service charges such as association or
maintenance fees. “Property taxes accrued” shall be determined
after accounting for the application of any and all statutory exemptions, abatements
or other reductions as required by law.
“Qualifying Residence” means
Class 2 real property located in the County, a Participating Municipality or
located in unincorporated Cook County
“State”
means the State of
(b)
Municipal Participation
(1) A Non-contributing Municipality must
provide to the Administrator a certified copy of the ordinance by which it
elects to participate in the Program and the Administrator can not authorize
the County to make payment on any Grants regarding qualifying residences in a
Non-contributing Municipality until such ordinance is provided.
(2) A Contributing Municipality must provide to the Administrator a
certified copy of the ordinance by which it elects to participate in the
Program and the Administrator can not authorize the County to make payment on
any Grants regarding qualifying residences in a Contributing Municipality until such ordinance is provided.
(c b) Claimant Eligibility Qualifications
(1) Beginning
with real estate property tax year 2007 (payable in 2008), and for each tax
year thereafter, the Administrator shall determine a claimant’s eligibility for
a particular claim year based upon the following:
a. In the claim year, the
Claimant shall be a person residing in a qualifying residence;
b. Claimant must be liable for payment of
the real estate property taxes of the qualifying residence for the claim year;
c. In the claim year, the Claimant must be
the owner of record of the qualifying residence or have a legal or equitable
interest in the property as evidenced by a written instrument, or Claimant must
have a leasehold interest in the qualified residence as evidenced by a written
instrument;
d. The Claimant’s annual household income
during the claim year shall be less than an amount set by the Administrator;
e. Claimant shall make a grant application to the Administrator, in a manner
and form prescribed by the Administrator; and
f. Claimant shall not be eligible for a
grant regarding a claim year on a qualifying residence if: 1.) the
Administrator has already approved a grant for the qualifying residence in that
claim year; or 2.) the Claimant was approved for a grant regarding a different
qualifying residence in that claim year.
(d c) Grant
Amount
(1) If the Administrator determines that a
Claimant is eligible for a grant regarding a claim year on a qualifying
residence, the amount of the Grant shall be the lesser of:
a. $700.00; or
b. the amount of the Property Taxes
Accrued on the Qualifying Residence for the claim year that is greater than 5% of the Claimant’s household income;
or
c. if the Fund does not have adequate
monies to finance all grants determined by the Administrator to be eligible
under this Ordinance in the amounts referenced in subsection (c) (1) a and (c)
(1) b above, then such grants will be made in a lower amount on a proportional
basis as to available monies in the Fund.
(e d) Administration of the
(1) The Administrator shall have the
authority to create and enforce rules it deems necessary to carry out
its responsibilities under this Ordinance.
The Administrator may delegate any of its duties contained herein that
the Administrator deems appropriate. to a Participating Municipality.
(2) The Administrator shall have the
authority and discretion to determine the eligibility of a Claimant, the amount
of the Grant, and the type of supporting documentation that a Claimant must
provide including but not limited to affidavit and financial records in order
to ensure that the tax savings resulting from the Grant are distributed only to
qualifying Claimants.
(3) The Administrator shall have the authority
to direct the County to make payment to an eligible Claimant for a Grant in an
amount authorized under this Ordinance.
(4) The Administrator shall establish a date
on which all grant applications for a particular claim year must be received by
the Administrator and after which no application can be made. The Administrator shall establish a date upon
which all applications shall be reviewed and a final determination is made as
to: 1.) which Claimants shall be eligible to receive a Grant; and 2.) the Grant
amount each eligible Claimant shall be authorized to receive.
(5) The Administrator shall establish a date
upon which a final determination must be transmitted to the County as to: 1.)
which Claimants shall be eligible to receive a Grant; and 2.) the Grant amount
each eligible Claimant shall be authorized to receive. Upon receipt of this
transmission, the County shall make payment to Claimants determined to be
eligible to receive a Grant in the amount authorized by the Administrator.
(f e) Funding of the
(1) The County shall establish and maintain
a Fund to finance Grants to Claimants that the Administrator has determined to
be eligible for such relief. The County shall collect monies for the Fund
and distribute authorized Grants to eligible Claimants pursuant to this
Ordinance.
(2) The County and Contributing Municipalities shall provide sufficient monies to
the County for the Fund in order to cover their requisite share of the cost of
Grants regarding a claim year for qualifying residences.
(3) The Administrator shall determine the
requisite share that Contributing Municipalities and the County will be required to
provide to the Fund regarding grants authorized by the Administrator.
(4) The County and Contributing Municipalities
shall pay their requisite share into the Fund, if any, within 30 days after the
Administrator transmits to the County the Administrator’s final determination
regarding: 1.) which Claimants shall be eligible to receive a Grant; and 2.)
the Grant amount each eligible Claimant shall be authorized to receive.
(5) The County shall not make payment to any
eligible Claimant for a grant amount authorized by the Administrator regarding
a qualifying residence until the applicable Contributing Municipality and the County have paid their
requisite share into the Fund regarding grants authorized by the Administrator.
Approved and adopted this ____ day of _________________.
Commissioner Claypool,
seconded by Commissioner Suffredin, moved to amend Communication No. 297144 by
accepting a substitute Ordinance. The
motion carried.
Commissioner Suffredin pointed out the two major changes in
the substitute Ordinance: 1) the distinction between participating and
non-participating municipalities is removed; and 2) all funds provided under
the Circuit Breaker program are distributed proportionally to qualifying
homeowners.
Chairman Daley stated that the letters received on this
subject matter will be entered into the record.
Commissioner Claypool stated that the purpose of the
ordinance is to provide targeted tax relief for individuals who are affected by
the current economic climate and rising property tax bills.
Chairman Daley asked who will bear the cost of the proposed
Circuit Breaker program.
Commissioner Claypool stated that under the substitute Ordinance
the cost will be borne by
Chairman Daley inquired whether the funding source is indicated
in the substitute Ordinance.
Commissioner Claypool stated that he believes that they are
two separate items that are linked together but not necessarily in the
substitute Ordinance.
Chairman Daley asked the Secretary to the Board to call upon
the registered public speakers, in accordance with Cook County Code, Sec.
2-108(dd):
1. Honorable Daniel J. McLaughlin –
President,
2. George Blakemore – Concerned Citizen
Chairman Daley called on James Houlihan, Cook County Assessor,
to address the Committee regarding to the Circuit Breaker Program. Assessor Houlihan provided a brief summary of
the program.
Commissioner Maldonado suggested that a cap should be
imposed on the income of eligible homeowners as part of the requirements to
participate in the Circuit Breaker program.
Assessor Houlihan responded that he would consider
supporting an income cap in addition to the five percent (5%) limitation. Further, Assessor Houlihan stated that he can
work with Commissioner Maldonado with regard to identifying an alternative
funding source for the Circuit Breaker Program.
Commissioner Schneider asked for clarification of the City
of
Myer Blank, Executive Director,
Commissioner Suffredin asked how many
Assessor Houlihan stated that certain taxpayers in the City
of
Commissioner Butler asked how much will it cost for the
Circuit Breaker Program and who will pay for it.
Assessor Houlihan stated that if the Circuit Breaker Program
is limited to households earning $100,000 or less, the estimated cost of the
program is between $63 and $90 million; the total cost to the county would vary
based on whether residual TIF funds are used, and whether bonds are issued to
pay for the program.
Commissioner Murphy suggested that other taxing bodies such
as the Water Reclamation District be included in this program.
Commissioner Silvestri suggested that imposing a means test
would alter the intent of the program, and asked if the program should be
considered a temporary or pilot program.
Assessor Houlihan said that would be a decision for the
Board of Commissioners, but he would not object to considering a pilot program,
especially since this is a new idea for
Vice Chairman Sims considered a similar proposal last summer,
targeted specifically to the Village of Ford Heights. Assessor Houlihan stated that the
Chairman Daley stated that the Assessor’s Office has the home
rule authority to determine assessments generally throughout the County, and
higher assessments can be considered a cause of higher tax bills.
Assessor Houlihan stated that his office looks at income
data, sales data and the economic data when determining assessments. If, for example, he lowered assessments across
the board by 20% to reflect the down turn in economic conditions, that
reduction would necessitate an increase in the tax rate, and tax bills would
basically remain the same. Taxpayers
would still complain about high assessments because they would not see a
reduction in what they must pay as a result of those assessments.
Assessor Houlihan acknowledged he is aware of a timing
problem with the three year reassessment cycle. For example, the South Suburban reassessments
are just being completed for the year ended
Chairman Daley asked Commissioner Claypool if he had an
amendment to the Substitute Ordinance.
Commissioner Claypool responded that at this time they will
take the suggestions offered into consideration and make any appropriate
changes to the Proposed Substitute Ordinance at a later date.
Commissioner Silvestri, seconded by Commissioner Peraica, moved to
adjourn. The motion carried and the
meeting was adjourned.
YOUR COMMITTEE
RECOMMENDS THE FOLLOWING ACTION
WITH REGARD TO THE
MATTERS NAMED HEREIN:
Communication Number 297144 Substituted
and Deferred
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Respectfully submitted, Committee on Finance Committee xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx John P. Daley, Chairman |
Attest:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Matthew B. DeLeon, Secretary
The audio recording for this meeting is available from the
Office of the Secretary to the Board,