Cook County’s Unique Position

Illinois and Cook County are both known for their confusing minutia. Illinois already uses an equalization factor for all property values, something that is not readily explainable. The County complicates matters by taxing only 10% of a home’s value, instead of the required 33.3% by Illinois law. Instead, an enhanced equalization factor is used every year, which brings the 10% all the way up to 33.3%. This changes yearly, as do tax rates. This means that tax bills can be quite unpredictable, especially the second installment. There is a litany of other confusing terms in Cook County, with TIFs being at the top of the list.

What are TIFs?

TIFs are not unique to Cook County or Illinois and are used across the country. Cook is notable for the sheer number of TIFs within its borders. In 2024, there were 404 separate TIFs in the county. This has made them a significant part of the county’s budget. Despite their importance to budgets across the county and city, TIFs are something of a mystery.The stated goal of TIFs is to help “blighted” areas regain their footing. This is achieved by freezing the equalized assessed value at the moment the TIF is created. This can be for a period of up to 23 years, though this can be extended further. All taxing bodies in that district then collect taxes at that value for the duration of the TIF. Once property values rise in the district, the TIF finally starts to take action. The TIF then combines the tax rates of the various taxing bodies and uses that to collect its own share of the property taxes from the excess value. As property values naturally increase, the TIF receives more funds.

These collected taxes can then be funneled back into the community in order to fund local development. This can be used to rebuild infrastructure, encourage development, and lead to an improved area for the people who live there. This is usually done through private companies. This makes the community’s property values increase, which then funds the TIF further. In theory, this should allow both the community and the TIF to grow, benefiting the city and county.

Taxes from TIFs Increase 1000%

While taxes have climbed across the board in Chicago and the surrounding area, none have matched the pace of those going to TIFs. While municipal taxes have gone up 200% and school taxes around 180% since 1995, TIF taxes have surged by 1000%. When broken down between Chicago and its suburbs, the number becomes even starker. While TIFs increased by 314% in the suburbs, they soared by 2,975% in Chicago itself. Thanks to declining values in many suburban communities, suburban increases have been limited in the past decade, but urban taxes keep climbing.

The Downside of TIFs

Outside of the extremely high rates, TIFs have other drawbacks as well. Since the assessment is frozen in designated areas, taxing bodies have a smaller tax base to draw funds from. This means that they are forced to increase levies outside of TIF areas, putting greater financial stress on surrounding communities. While assessments are frozen, tax rates are not, meaning people inside the TIF will still feel increases, which were often hiked due to the TIFs siphoning funds in the first place. As the number of TIFs across Cook County grows, property taxes spike higher.

TIFs as a Loophole

The Treasurer’s study showed that TIFs are being used as a loophole to get around statewide caps. The Property Tax Extension Limitation Law (PTELL) was put in place across the state to cap property taxes. While PTELL applies to most tax rates, it does not apply to those associated with TIFs. This means that these taxes can grow unrestrained. Additionally, when a TIF expires, the assessed value is added to the tax rolls of taxing bodies outside of the PTELL cap, allowing for higher taxes to be levied.

TIFs often collect more money than can be reinvested into a community. This leads to a surplus, which can then be shared with taxing bodies. This allows schools, municipalities, and others to share in raised funds that they would not otherwise have. This acts as backdoor funding for many programs across Chicago and the county, and serves as yet another way to avoid caps. This is on top of other issues, such as schools raising their tax rates to the maximum amount under PTELL every year.

Legislative Options

Thanks to the state of taxes across Illinois and recent problems in Cook County, politicians on both sides of the aisle are looking for potential solutions. Some are targeted at TIFs, including limiting the value that taxing bodies can collect after a TIF closes. Others are broader, including fixes to the pension system, which has been an anchor around the neck of Illinois for almost a century. First proposed by the Cook County Assessor, a “circuit breaker” to cap increases has also gathered steam in the past year. However, the outlook is not optimistic, as cooperation is a rare thing. Pensions are also a constitutional right, meaning reforming them has proven to be nearly impossible. There are, however, options for taxpayers to explore.

Property Tax Appeals

Ever since the upheaval generated by the 2023 reassessment of Cook County, property tax appeals have become favored by businesses and homeowners alike. The Cook County Assessor’s Office (CCAO), Treasurer, and County Clerk have all endorsed appeals as a solution to out-of-control taxes. These protests ensure that a homeowner or business is being assessed correctly and fairly. These appeals can target both lack of uniformity and overassessment, and correct these errors if there is enough evidence. Cook County has started opening up for assessor appeals, with a second appeals season with the Board of Review (BOR) to come.

O’Connor Helps Gather Evidence and Provides Analysis

Thanks to TIFs, taxing bodies, pensions, and more, property values and taxes will continue to shoot through the roof. If you are thinking about filing an appeal, we at O’Connor can help you by providing evidence and analysis. When you first sign up with us, you will be given a client success consultant. This consultant will act as your advocate and point of contact through the whole process, ensuring you are always kept up to date. We also have a branch office in Aurora, meaning we have local experts who know the perfect evidence to uncover.

Appeals are centered around good evidence, and we always strive to provide the best possible. This starts by us analyzing your assessment for errors or obviously incorrect values. Next, we will compare your home or business using our state-of-the-art databases, which can find comparable properties to use for arguments of overassessment or lack of uniformity. Once we have gathered the relevant evidence, we will then coordinate an appeal with Kieta Law. Your attorney will file appeals for you, represent you in hearings, and help you land the best reduction possible. The evidence we provide has no upfront cost, and you will only need to pay a portion of your savings if you and your attorney can lower your taxes.