02/22/2013

By: Brittany Flaherty Theis

In Illinois, the property tax cycle is composed of six main stages: (1) assessment, (2) review, (3) equalization, (4) levy, (5) extension, and (6) collection and distribution. It is a two-year cycle in which the second year of cycle one overlaps with the first year of cycle two. During the first year, property is assigned a value as of January 1 of that year. During the second year, the tax bills are calculated and mailed, payments are collected, and funds are then dispersed to local taxing districts. Because the six stages span two years, a tax bill received in year two is based on the value of property as of year one, resulting in a two-year tax cycle. This blog entry deals primarily with delays in the second stage – review.

The first step in the property tax cycle is assessment. Local assessing officials value property in order to determine the property tax burden each taxpayer (property owner) will bear. Most property in Illinois is assessed based on its value on the open market. This is known as market value.

Taxpayers who believe their property has been unfairly or incorrectly assessed can file complaints with the board of review in their county. In most counties, taxpayers are encouraged to consult with the local assessing official before filing a complaint. If a taxpayer completes the review process at the county board of review level but disagrees with the board of review’s decision, the taxpayer may either appeal to the circuit court or the Illinois Property Tax Appeal Board (“PTAB”). Local taxing bodies have the opportunity to intervene in appeals before local boards of reviews, the circuit court, and the PTAB. Local taxing bodies also have the right to file undervaluation complaints with their local board of review and appeal those assessments to the circuit court.

Taxpayers who appeal the county board of review’s decision to the circuit court file a tax objection complaint. Tax objection complaints may object to all or any part of a property tax for a specific year. However, the taxpayer must pay the taxes before filing in the circuit court. The complaint must specify particular objections to the assessment, taxes, or levies. It is important to note that taxes and levies are presumed to be correct and legal. Rebutting this presumption is the taxpayer’s responsibility.

Alternatively, taxpayers can file an appeal with the PTAB. Petitions for appeal must be filed with the PTAB on prescribed forms according to the rules of the PTAB. Again, taxes must be paid pending the outcome of the appeal.

Numerous factors impact a taxpayer’s decision to appeal to either the circuit court or the PTAB. One factor that might receive increasing weight is the length of delays experienced at the PTAB. In fact, the Illinois Auditor General released the results of its compliance examination, which found that the PTAB did not allow for the speedy hearing of all appeals despite its mission to provide an informal public forum for the speedy hearings of contested appeals. Limited resources and a surge in the number of appeals filed with the PTAB have played a role in this uphill battle. Specifically, as of June 30, 2010, the PTAB had 55,845 appeals pending. In 2011 that number grew to 64,828 and to 85,705 in 2012. In its report, released on February 14, 2013, the Auditor General stated that based on the number of cases pending and the number processed during the 2012 fiscal year, the PTAB would require more than two years to process the current pending cases. Currently, residential property assessments on appeal to the PTAB experience delays of over one or two years. The delay experienced by owners of complex, industrial properties can be several years.

The PTAB faced significant budget cuts in 2003 and 2004 and has been fighting for increased resources since that time. Prior to those cuts, the PTAB employed 53 full-time staff with a caseload of 18,836. Following the cuts, its full-time staff was reduced to 26 members. By 2011, the PTAB had a full-time staff of only 18, but faced new appeals totaling 37,960. However, in fiscal year 2012, the PTAB received approval to hire additional Administrative Law Judges and clerical staff. Another budget increase was approved for fiscal year 2013.

Although the Auditor General’s report found that the PTAB had material noncompliance with its requirement to provide a speedy hearing, it found that the agency used and collected funds in accordance with all applicable regulations. Further, it recommended the PTAB continue its efforts to obtain the resources necessary to adequately address its responsibilities. The PTAB agreed and intends to pursue an increase in its budget.

To discuss your taxing body’s options regarding property tax appeals, please contact Whitt Law Attorney Josh Whitt or Brian Bare.

 

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