A new report shows how scofflaw landowners are not paying property taxes and how low tax collection rates are creating dire situations in communities throughout the south suburbs.
The data compiled by researchers with the office of Cook County Treasurer Maria Pappas help shed light on reasons for blighted conditions such as vacant lots, lack of jobs, scarce business investment and sky high property tax bills.
“Collections in many economically struggling, mostly minority south suburbs are perilously low,” researchers wrote. “Those collection rates, which were below 53% in four suburbs, make it tough for schools, municipalities and other government agencies to provide basic services.”
Cook County has 130 municipalities, yet the south suburbs are home to 14 of 15 places with the lowest collection rates.
“Ford Heights — where the collection rate was 29.3% compared to the countywide rate of 96.0% — has not been able to afford a police force for years,” researchers noted.
The Cook County sheriff provides police services in Ford Heights.
The tax collection rate problem appears to be getting worse. When I wrote about the issue two years ago, the collection rate in Ford Heights was 41.3%.
Ford Heights remains an outlier, but three other south suburban communities only collect about half the funds levied to pay for police and fire protection, schools, parks, libraries and other services that affect quality of life for residents.
Collection rates were 49.9% in Robbins, 52% in Harvey and 52.1% in Phoenix. Taxing districts collected just $3.5 million of $7 million billed in Robbins, $29.6 million of $56.9 million in Harvey and $1.4 million of $2.7 million in Phoenix.
“These rates are driven down by the high number of vacant and abandoned properties,” researchers wrote. “Ford Heights has the highest share of vacant lots in the county, at 47.1% of taxable properties.”
Countywide, researchers found, owners of properties improved with homes, stores, factories and other buildings paid their taxes 95% of the time or more. The type of property accounting for the bulk of the low collection rate crisis is vacant land. The county collects taxes from owners of just 70.7% of all vacant properties, according to the study.
Researchers studied how much revenue taxing districts collected from $16.7 billion in property taxes levied for the 2021 tax year and due to be paid in two installments during 2022.
The report mentioned how low collection rates affect people in various communities. Robbins, for example, reported 23 water main breaks during 2022. A lack of funds due in large part to low tax collections has hindered the town’s ability to repair infrastructure and consistently provide water service to homes and businesses.
Harvey had to lay off firefighters in order to make required payments to its public safety pension fund.
Other communities with the county’s lowest collection rates were Riverdale (62.3%), Calumet Park (74.7%), Markham (75.5%), Dolton (76.7%), Dixmoor (78.2%), Burnham (78.6%), Chicago Heights (80.3%), Calumet City (81.9%), Park Forest (83%), Maywood (83.6%) and South Chicago Heights (86%).
The amount of shortfalls due to uncollected taxes varies depending on the size of communities. Chicago Heights, for example, is missing out on $15 million a year because of unpaid taxes. Calumet City is $17 million short of what it expected to collect.
Calumet Park is shortchanged to the tune of about $4 million annually, while tiny Burnham is missing about $2.5 million of its money each year.
Collection rates are indicators of other factors that point to systemic inequality that has marred the Southland for decades. Tax collections are low partly because tax rates are so high.
“Further increases in tax rates in many south suburbs would worsen the outsized burden already placed on property owners in those towns,” the treasurer’s researchers warned.
Municipalities with the highest tax rates in Cook County are all in the south suburbs, according to the Cook County clerk’s office. Park Forest has the highest composite tax rate at 41.6% of assessed values, followed by Riverdale at 31.1% and Phoenix at 30%. For comparison, the city of Chicago’s composite tax rate is 6.7%.
High tax rates discourage investment by prospective businesses and make it more difficult to lure companies that would create jobs and grow the tax base. The relative lack of commercial and industrial properties in the Southland shifts more of the tax burden onto homeowners.
Over decades, a downward spiral has developed in which many south suburban residents no longer have access to higher quality education, health care, employment and other opportunities available to residents in other parts of the county.
The housing market crash of 2009 and Great Recession that followed hit the Southland particularly hard, said Kristi DeLaurentiis, executive director of the South Suburban Mayors and Managers Association. Meanwhile, the state has been keeping a larger share of income taxes and disbursing a smaller percentage of revenues through the Local Government Distributive Fund.
“SSMMA has been advocating to get our fair share restored from the state so we can relieve some of the tax pressures on our taxpayers,” DeLaurentiis said.
Data on collection rates indicate the challenges communities face as they try to serve residents.
“We see this as a snapshot of what is happening at the community level and how communities are being asked to do more with less,” she said.
Data such as collection rates help highlight inequities and give elected and appointed leaders insight into how to address concerns and help level the playing field. Pappas has created a think tank and charged researchers to discover and document inequities in the property tax system.
“This study says, ‘Look, we have a great collection rate overall, but if you decipher it the south suburbs are suffering,'” Pappas said.
Previously her team, which includes former Chicago Tribune reporters Hal Dardick and Todd Lighty, has reported on how redlining deprived Black people of homeownership opportunities in the south suburbs and how vulture capitalists have exploited errors in the tax sale process to transfer wealth out of the region.
The latest report will be published as the inaugural edition of a newsletter, Pappas said. Pappas said she has presented findings of the two previous studies at national and international conferences.
“I value Hal and Todd. I value that they are in an environment where they are free to think. I was fortunate enough to steal them away from the Chicago Tribune,” she said. “They’re creating international attention for inequitable matters in the property tax system.”
Ted Slowik is a columnist for the Daily Southtown.
