By David Orr
Last month we learned that the FBI is investigating a Cook County Board of Review employee for accepting cash bribes in return for lowering property assessments on two dozen commercial and residential properties. A photo filed in federal court even showed the guy sitting in his car, thumbing through a wad of thousands of dollars handed to him by a government informant.
There’s reason for taxpayers to fear that this is not an isolated case.
The employee reportedly suggested as much, saying the money would be split between multiple employees. And we’ve seen these cases before, with board employees convicted of federal bribery and conspiracy charges in the 1970s and early 1980s and again in 2013.
We’ve also seen a lack of leadership on ethical standards at the board and county.
In 2018 three board commissioners — including current Commissioners Michael Cabonargi and Larry Rogers — were required to return tens of thousands of dollars of improper campaign donations from property tax attorneys and other interested parties. According to a recent ethics complaint, more than half of the $68,950 Cabonargi returned ended up in a parallel fund run for his benefit.
Similarly, consultants for Rogers set up a political action committee where tax attorneys and appraisers whose contributions had been returned could donate without triggering the county’s ethics ordinance—and they have donated thousands of dollars. The PAC was established days before Rogers returned the improper donations, and it listed Rogers himself as “custodian of committee accounts.”
Meanwhile a Cook County inspector general investigation last year found the board’s employment practices lacked basic safeguards against patronage abuses, with employees hired based on political recommendations and routinely enlisted to do political work.
At the County Board, President Toni Preckwinkle has failed for two years to act on proposals to strengthen the county’s ethics ordinance. She backed former Assessor Joe Berrios despite his refusal to abide by the county’s ethics ordinance.
To what extent is the public paying for this?
Cook County voters decided they’d had enough of this broken system in 2018 when they elected reformer Fritz Kaegi as assessor. Under the old system, opaque and arbitrary assessments created business for politically-connected property tax lawyers such as Mike Madigan and Edward Burke, who got big reductions for their clients and in turn funded campaign war chests.
Unfair assessments shifted billions of dollars of tax burden from wealthy areas to middle-class communities, and investigations by the Chicago Tribune and others showed that commercial and industrial properties were even less fair. Industry analysts found that those properties were undervalued by nearly 40% countywide and almost 50% in Chicago, with many of the worst cases in the central business district. And they determined that commercial assessments were highly regressive at the expense of small businesses.
While Berrios and Board of Review commissioners claimed the appeals process remedied inaccurate assessments, an analysis by the Tribune found that assessments were even less equitable after appeals.
At the state level, the Property Tax Appeal Board gives connected property owners yet another bite at the appeals apple, as the recent $1-million reduction of Trump Tower’s assessment showed. It’s an example of too many layers of bureaucracy undermining good government.
So it shouldn’t be a surprise that Kaegi’s objective, market-based assessments would increase valuations for big commercial properties — or that the Board of Review would undercut those reforms.
In reassessments of the north suburbs in 2019, market-based commercial assessments by Kaegi’s office would have reduced the burden on homeowners significantly, but they were largely reversed by the Board of Review, which reduced the assessor’s residential assessments by 6% but slashed business assessments by 30%.
Some big commercial properties got reductions far above average, according to the Cook County assessor’s office’s 2020 Township Assessment Report. Assessments of two country clubs in Glencoe were reduced by 48% and 74%. A major pharmaceutical company’s plant and offices in Melrose Park were cut by 80% and a data processing center in Franklin Park got a 72% reduction.
The trend continued in last year’s south triennial reassessment, when the board reduced homeowners’ assessments by just $93 million, or about 1% of the total, while reducing commercial assessments by well over $1 billion, a whopping 23.4%. The site of a new Amazon warehouse in Cicero had its assessment cut by the board from $4.1 million to $2.6 million.
Every reduction by the board for a big business means higher taxes for average homeowners, small businesses and tenants struggling to get by. We need to push forward with the reform voters backed in 2018.
Board of Review commissioners should adopt Kaegi’s ban on campaign donations from property tax lawyers. They should fully implement the inspector general’s recommendations on employment practices. They should make the appeals process anonymous, as Kaegi has done. That might make bribery schemes more difficult. And the County Board should pass a strong ethics ordinance.
David Orr is the founder of Good Government Illinois and was Cook County clerk from 1990 to 2018.