* Taxing Us Through the Roof and Out of the Neighborhood

Reader Submitted

Dear Representative Osterman,

I am writing about the property tax increase that your constituents will be facing when we receive our tax bills next year. Unless something is done by state, county, and city officials – and done quickly – many residents will be forced to leave neighborhoods they have long resided in and contributed to.

According to my calculation, based on a recent Chicago Reader article, my property taxes are subject to an increase of approximately 105% over 2005.

Aside from the fact that it seems utterly outrageous for local governments to get a 105% raise at my expense (I certainly haven’t seen a 105% rise in my salary in the last 4 years), it is further insult that I am effectively being penalized, to the point that my husband and I may have to sell our home, for being one of the people who helped make Rogers Park the halfway livable place it is today.

We bought our home in 1991 when people were still largely fleeing the neighborhood. Over the past 15 years we have renovated, we have picked up tons of garbage deposited by people who think it’s fine to dump garbage from their cars and as they walk the city sidewalks. We have suffered thousands of dollars in property damage to our fence (which we’ve rebuilt so many times I’ve stopped counting) and our cars. Our house has been burglarized, our front yard torched. We have kindly shoved snow from our walk and from our older neighbors’ sidewalks nearly every time it snows. We have tried to frequent, as much as possible, local businesses. We stayed and suffered the drug dealers and their addict customers, the nursing homes that are now more halfway houses than elder care centers. We have opened our yard to the neighborhood for the Rogers Park garden walk. We’ve stayed through the closing of Grandpa’s restaurant on Touhy, the tapas restaurant on Sheridan, Foodstuffs on Morse, the Jewel on Morse, the closing of the diner on Morse and the hardware.

While some new businesses are opening in Rogers Park (Poitin Stil, Gruppo di Amici, Dagel & Baly, Morseland, Rogers Bark), I don’t think it’s far off the mark to say that there may be less businesses in Rogers Park today than there were in 1991 (or at minimum there has been no increase). By virtue of a real estate bubble (that may or may not sustain itself into the future), the value of our real estate has increased beyond reasonable increases that could have been expected due to renovations and time. In short, the county is now demanding 105% more money from us not because the county or state did anything, not because our neighborhood has substantially improved in the last four years and our quality of life here is better, nor because we’ve sold our home and realized a significant gain, but because of a real estate bubble!

Increased home valuations (and their subsequent assessments) are nothing more than vapor. My home may or may not be worth $X at any given point in time, but it is certain that any increase in its value will not be enjoyed until the house is sold. Between yesterday, today, and some point in the future when it may be sold the value is likely to fluctuate at any given point – maybe up, maybe down. But until it is sold the increased value is nothing more than a paper gain. Paper gains, as we all know, are transitory and can disappear in the blink of an eye. This is the case for all property owners. Yet, state and local governments have determined that I, and others like me, should pay 105% more than four years ago because real estate has increased in value.

Even the federal government doesn’t tax paper gains such as the increased value of one’s mutual fund until one sells! How is it that we can be taxed at the state level for unrealized gains?

Such increases are likely to force out long-term residents. In an especially fragile community like Rogers Park, a mass exodus of people, particularly at a time when the real estate market is softening, could be ruinous to the community and lead to depressing prices. Think it can’t happen? But it has happened to any number of communities across the U.S. over the years – Connecticut, southern California, Texas, just to name a few. Bubbles burst and when they burst the more fragile get hurt the most. Further, such increases are a slap in the face to long-time residents and send a message that our politicians prefer we not live in a community for any length of time. Rather, we should be churned out so that other, more flush residents can take our place and provide more revenue to government. Surely, you will object to my claims but how can a taxpayer see it otherwise?

I am dismayed by the lack of real movement on the part of our elected officials to do something meaningful and lasting that will provide relief to the middle class taxpayers of Cook County. Such lackadaisical efforts to date seem to show a complete lack of regard for voters, almost to the point of scorn. Is it that the elected officials of Illinois are simply out to get as much from taxpayers as possible, consequences be damned? But there will be consequences – and not just to the future job security of elected officials (any politician who thinks that voters will not remember a 105% increase in their property tax bill during the next election cycle is deluding themselves; this is serious pain that will not be forgotten).

People will be forced to move. Perhaps they will stay in Cook County but odds are that many will look to move out of county, perhaps out of state. When the tax burden becomes too great, people leave for more kindly environs. Chicago now has a 9% sales tax; Illinois income taxes us 3%, and our property taxes, if left untended, will be some of the highest in the country. Tennessee, on the other hand, has no income tax and property tax rates are a fraction of Cook County tax rates; their sales tax is negligible. While I love Chicago, as I am sure others do, is my love for the city worth 105% more today than yesterday? I’m not sure that it is, particularly if I have to do without or save less money for retirement to continue to reside here.

Representative Osterman, I am sure that you work very hard, and you are no doubt in the same position as all north side property owners. Given that I’ve not seen any serious movement on the part of politicians to address this grave matter, I can only assume that our elected officials can afford the increase. Good for those of you who won’t feel these significant increases. But many of us will not be able to afford it, and we will be forced to sell and move. If the point of this exercise is to make Chicago and Cook County a gated community where only those earning in excess of hundreds of thousands of dollars can afford to live, then by all means the property taxes should be left as they are. I imagine that it won’t take terribly long for those of us with somewhat less income to flee the area. Perhaps we will be long gone by the time of the next elections since, conveniently, we won’t be receiving our tax bills until after the 2006 elections. In looking over the Illinois bills presented in the last two years, I see a lot of spending and appropriations but little in the way of restraint or in tax relief. It’s depressing. Government appears to have become a revenue-generating, drunk on spending beast with few politicians interested in stemming runaway spending and costs, particularly in Illinois. Meanwhile, our neighbors to the south and east offer kinder terms that have enticed many people and businesses including Nisson.

If you and your colleagues in the state assembly care about the home owners of northside Chicago, then you will take serious and meaningful action as quickly as possible. Sponsoring a bill along the lines of Prop 13 in California would be a good start. If such a move seems too radical, then an increase in the exemption is certainly in order. Surely this issue is just as important as any of the bills you have sponsored over the last few sessions.

Sincerely,

A Rogers Park Neighbor

Writer blognotes: A note on the tax increases to RP residents: Is our neighborhood 105% improved from 4 years ago? Is there 105% less crime such as vandalism, muggings, b&e's, shootings, gang activity? Or is it about the same (and in some pockets, worse)? Have we seen a 105% increase in the education of the children of the neighborhood? Do we experience 105% more city and county services? Are our roads 105% improved from 2002? Do we have 105% more police than in 2000? Take a moment to ponder whether our neighborhood is "worth" the same as, say, Lincoln Park, because RP residents will be paying property taxes at the same level as LP and even Evanston homeowners in 2007.

Renters, think this issue doesn't concern you? Do you think your landlords are going to eat these property tax increases? These increases will be passed to you, and in fairly short order. Your rent will start to look a lot like LP rents also. Or, your rental options in RP will dry up even more when your landlords toss in the towel and sell or finally go condo. As for new businesses - well, they too will see rent increases. Will fragile, growing concerns be able to absorb the increases? Or will big rent increases push them over the edge? Will we be able to attract new businesses, particularly since we're barely able to get any now? What kinds of new businesses will be able to afford the increased rents with the much lower (than Lincoln Park or Wicker Park) foot traffic? If you were Dagel & Baly could you afford a $400/mo increase in your rent, or, for that kind of money would you be better off closing shop and heading south or north?

Blognotes: I talked with Representative Osterman on Sunday and he promised to work on this very important issue. Representative Osterman told me he is going to co-sponsor a bill to cap the property tax increase. Between the lines, this tells me there WILL BE a increase. Unlike Alderman Moore who openly supports higher taxes through Special Service Area taxes and higher user fees, Representative Osterman wants to put a stop to the overwhelming burden we face as taxpayers being "nickled and dimed" to death. We all must keep the pressure on Representative Osterman. Our elected official is only as good as his deeds, not words.