Chicago City Wire

A proposed increase to Chicago's property tax rate would bring with it unintended -- or perhaps intended -- consequences such as flawed property valuations that often require an attorney to appeal, an Illinois Policy Institute representative told Chicago City Wire.

As property tax rates go up, it creates lucrative work for attorneys, including House Speaker Mike Madigan (D-Chicago), Chicago Alderman Ed Burke and Illinois Senate President John Cullerton (D-Chicago), Illinois Policy Institute writer Austin Berg said.

"While families across Illinois are being forced out of their homes because of high property taxes, political insiders continue to cash in on the corrupt property tax appeals scheme in Cook County," Berg said. "No public official should be allowed to work in the property tax appeals business. It is a blatant conflict of interest."

Berg recently wrote an Illinois Policy Institute article "Meet the Politicians Getting Rich Off Chicago's Property-Tax Scheme," in which he takes aim at state and local politicians who benefit from property-tax increases.

"Illinois House Speaker Mike Madigan and Chicago Alderman Ed Burke both run law firms specializing in the lucrative field of Cook County property tax appeals, one of the most inefficient, corrupt systems in urban politics," Berg said in his article. "Illinois Senate President John Cullerton is a member of a large law firm that handles a range of issues, including property-tax law. The three have held political office in Illinois for a combined 126 years."

On its face, property tax hikes result from the city and state's dismal financial situation. In late September, Moody's and S&P Global Ratings dropped the state's bond ratings as the Illinois pension and debt crises continue to deepen. Former Federal Deposit Insurance Corp. Chairman William Isaac and others have called for the city of Chicago and the state to declare bankruptcy, which is possible for the state only with a change to its constitution. Meanwhile, Chicago-area commuters are considering moving to the so-called "affordable shore" in Indiana, where billboards boast of that state's balanced budget.

In September, Chicago Mayor Rahm Emanuel proposed almost $600 million in property tax increases over the next four years, just part of an unprecedented series of tax and fee hikes that could total $2.5 billion. The money would go toward shoring up police and fire pension funds, Chicago Public Schools construction and balancing the city's budget, Emanuel said. The proposed hikes include a new monthly garbage-hauling fee, new taxes for ride-sharing and taxi trips, building-permit fee increases and the first-ever electronic cigarette taxes.

With the state strapped for cash, higher property taxes seem inevitable, but that isn't the only way Chicago property owners and other taxpayers would be forced to pay. Flawed property valuations are almost inevitable, and they often require an attorney to fix. So tax increases beget flawed property valuations, which beget more work for attorneys who specialize in property tax appeals.

"It is a blatant conflict of interest," Berg told Chicago City Wire. "It's not surprising that some of the most successful property tax lawyers either have an extraordinary level of political influence or are politicians themselves."

The value of property in Cook County is assessed every three years by the county Assessor’s Office. The assessed value is used to calculate property taxes.

Property owners can appeal the assessed value by filing a request for a reduction, appealing to the Cook County Board of Review, suing the county or seeking a settlement agreement with the county's attorney. The appeals process is complicated, and many property owners require the assistance of an attorney.

The Cook County Board of Review processed approximately 400,000 such appeals in 2013, and almost two-thirds of those appeals were successful, which Berg called astonishing.

"Any way you slice it, taxpayers lose," Berg said in his article. "Choose not to appeal your assessment, and the government pockets the extra money. Choose to hire a politically connected law firm, and that law firm typically pockets anywhere from 25 to 50 percent of the winnings. And each reduction for a politically connected business means an increase in property taxes for those lacking the right political connections."

The process means millions of dollars for attorneys who work those appeals, Berg told Chicago City Wire.

"House Speaker Mike Madigan and others have made millions of dollars selling their political influence to large corporations," Berg said. "It needs to stop. There is no excuse."