Politics

Mayor Daley Wants Tax Break For Homeowners

Daley Says There Was Rampant Fraud In Appraisal System During Boom

CHICAGO (CBS) ― Tax bills are in the mail and you better brace yourself. As CBS 2's Susan Carlson reports, in the midst of the struggling economy, many Chicago home owners are facing higher property taxes.

Kristen Molenhouse, a Chicago home owner, opened up her property tax bill this morning.

"It's just a lot of money," Molenhouse said. "You have to plan to save up for it and it just hits you kinda hard."

The latest installment is almost $3,800 for her three-bedroom condo in the East Village neighborhood. With Molenhouse currently out of work, it means she and her husband have to do some belt-tightening.

"Right now I'm in the midst of looking for a job, so it just adds to the financial strain," Molenhouse said. "And then with the economy, stock market. It's definitely a big strain right now."

Mayor Richard M. Daley says a "very scary situation" in the economy has proven that homeowners need a tax break, and the city wants to provide it.

As CBS 2's Joanie Lum reports, homeowners know the value of housing is down, and wonder why they are paying such high property taxes. In response, Mayor Daley called on the Cook County assessor's office to provide relief for taxpayers.

"I think people are frightened about their investments, they're frightened about their homes and everything else," Mayor Daley said. "This is a very scary situation."

Current tax bills are based on assessments conducted two and a half years ago, when home values were much higher. Even still, Mayor Daley says appraisals of some homes in Englewood are fraudulent.

"How can they appraise a home, three blocks from here, or four blocks from here, for $300,000, $400,000?" Mayor Daley said.

The mayor blames the higher taxes on outdated and inflated assessments, and legislators lowering the exemption from $40,000 last year to $26,000 this year. He's calling on the General Assembly to increase the homeowners' exemption and make it permanent.

"The Assessor's Office welcomes the mayor's support for having an annual adjustment factor for assessments," said Eric Herman of the Cook County Assessor's Office.

Homeowners all over the city are receiving tax bills that reflect 2006 appraisals. At that time, the economy was growing, and according to Mayor Daley, there was rampant fraud in the appraisal system.

"Once you do a fraudulent appraisal on one block, they're all the same then. See, they go into the most recent appraisal – all the mortgage people, the appraisers, the lawyers, everybody that has been well taken care of – they got all the money," Daley said, "and what's left is this whole appraisal system, which is truly unfair, and I think it's corrupt as well."

Mayor Daley says economically disadvantaged neighborhoods are hit hardest. He encouraged homeowners to appeal their assessments if they have not done so in the last two years.

"I don't see no out. I don't know how people are going to make it through the winter," said Cubby Miles, Englewood resident. "You're gonna have more homeless people in the long run."

The bill for this year cannot be changed by such an action, but homeowners who appeal do have a chance at getting a fair market value for their homes and paying the taxes at that level for next year.

Facing a major hole in the budget last year, Mayor Daley hiked property taxes by $86 million – the most so far in his time in office – for an increase that will not appear on homeowners' bills until next year. But following dramatic changes in the economy, he has now called for relief.

Unless action is taken, Chicago homes will not be reassessed until 2009. And it will take until 2010 for tax bills to reflect those new figures. Anyone with questions about this year's tax bill, or wanting to appeal, should call the city's 3-1-1 information line and ask for the Tax Assistance Center.

CBS 2's Joanie Lum and Susan Carlson contributed to this report.

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