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Effective Tax Rates Cook County Commercial/Industrial Properties



Article:
The Civic Federation recently completed a study of estimated effective property tax rates from 2003-2012 for selected municipalities in Northeastern Illinois. They make direct comparison utilizing effective tax rates which account for varying state multipliers every year. An effective tax rate of 5%, for example, would imply that a building owner with a $100,000 property could anticipate a $5,000 property tax bill. The Civic Federations uses median property values in their calculations. 

Commercial/Industrial Effective Property Tax Rate

Commercial

Industrial

2003

2012

% Change

2003

2012

% Change

Chicago

3.01%

4.87%

61.70%

1.73%

3.23%

84.10%

Evanston

5.30%

5.52%

4.10%

5.84%

5.84%

-0.10%

Glenview

4.03%

4.64%

15.20%

4.44%

4.90%

10.60%

Arlington Heights

5.21%

6.07%

16.50%

5.74%

6.42%

11.80%

Barrington

3.89%

4.63%

19.00%

4.28%

4.89%

14.20%

Elgin

5.73%

7.00%

22.20%

6.32%

7.40%

17.30%

Schaumburg

4.68%

6.17%

31.90%

5.16%

6.53%

26.50%

Elk Grove

4.02%

5.44%

35.20%

4.43%

5.75%

29.70%

Orland Park

4.61%

6.30%

36.70%

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Oak Park

5.71%

8.00%

40.10%

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Chicago Heights

7.34%

11.30%

54.00%

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Harvey

9.38%

15.10%

61.10%

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The above analysis reflects commercial and industrial properties only (no residential). In four of the communities there were insufficient arm's-length sales in some years to draw meaningful conclusions. This matches a disturbing pattern we have noted in our research of south suburban commercial and industrial sales in which few arm's-length transactions can be found, particularly in high-tax rate communities. It seems that properties simply may not sell without some incentives to mitigate high property taxes. 

A typical $100,000 commercial building in Chicago could anticipate a $4,878 tax bill (versus $3,001 in 2003). A $100,000 Chicago industrial building could expect a $3,230 tax bill (versus $1,730 in 2003). In Harvey a $100,000 commercial building could anticipate a $15,100 tax bill.

We were surprised to see some of the northwest suburbs with very strong tax bases such as Schaumburg and Elk Grove Village still needing substantial effective tax rate increases to keep up with local government spending. These suburbs may be losing some of their relative tax advantage to other nearby communities with weaker tax bases due to their higher spending levels.