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C H A P T E R 3 Figure 2 The Tax Share Effect Explains Most of the Changes in Individual Taxes Payable Over Time Actual Taxes Payable vs. Taxes Had Extensions Stayed at 2006 Level Decomposing Actual Changes In a Taxpayer’s Taxes Payable into the Tax Share Effect and the Tax Extension Effect Nominal Taxes Payable to Cook County 800 780 760 740 720 700 680 660 Cook County 2006 2007 2008 2009 2010 Actual Taxes Payable Taxes Payable if Extension Stayed at 2006 Level Nominal Change in Taxes Payable to Cook County 100 80 60 40 20 - (20) (40) (60) (80) Cook County 2007 2008 2009 2010 Tax Extension Effect Tax Share Effect Nominal Taxes Payable to City of Chicago 1,800 1,700 1,600 1,500 1,400 1,300 1,200 City of Chicago 2006 2007 2008 2009 2010 Actual Taxes Payable Taxes Payable if Extension Stayed at 2006 Level Nominal Change in Taxes Payable to City of Chicago 400 300 200 100 - (100) (200) City of Chicago 2007 2008 2009 2010 Tax Extension Effect Tax Share Effect Nominal Taxes Payable to Chicago Board of Education 4,900 4,700 4,500 4,300 4,100 3,900 3,700 3,500 Chicago Board of Education 2006 2007 2008 2009 2010 Actual Taxes Payable Taxes Payable if Extension Stayed at 2006 Level Nominal Change in Taxes Payable to Chicago Board of Education 800 600 400 200 - (200) (400) Chicago Board of Education 2007 2008 2009 2010 Tax Extension Effect Tax Share Effect Source: Authors’ tabulations using data provided by the Office of the Cook County Clerk 36 The Illinois Report 2013
y the tax share effect and the red bar represents the change caused by the tax extension effect. The sum of the two bars equals the total actual change in tax liability. Consider the middle row, were we show the annual changes in a property’s tax liability to the city of Chicago. The bars for 2007 decompose the taxpayer's change in tax liability from 2006 to 2007. The blue bar demonstrates that the tax share effect caused an increase in tax liability of about $250 and the tax extension effect caused an increase of about $60. Thus, from 2006 to 2007 actual tax liability increased by $310. From 2007 to 2008, the tax share effect caused tax liability to decrease by about $90 while the tax extension effect caused tax liability to increase by about $10. Thus, from 2007 to 2008 actual tax liability decreased by about $80. In all years and in all three jurisdictions, the tax share effect explains at least half of the total actual change in tax liability. Both columns show that the variation in annual tax payments for this property is mostly due to changes in its tax share. In the first column, the blue and red lines move in tandem, indicating that holding the tax extension constant does little to reduce annual variation in tax liability. In the second column, blue bars that are larger than the red bars indicate that changes in tax share account for most of the annual changes in this property’s tax liability. A Proposal For A New Property Tax Statement Figures 3 and 4 (on pages 38 and 39) each show a different property tax statement for the same property. Though all identifying information has been removed from the statements, they reflect tax liability for an actual property in the North Chicago Township. We refer to our reformulation of the statement as the “new statement” (Figure 3) and the statement as it was mailed in 2009 as the “old statement” (Figure 4). The main difference between the old and new statements is the way information about changes in tax liability is conveyed to the taxpayer. The old statement includes information on jurisdictions’ tax rates. In the new statement, we drop the tax rates in favor of information on jurisdictions’ extensions and tax bases and taxpayers’ tax shares. The old statement includes none of this information.* Because the tax rate is the ratio of the extension to the tax base, excluding tax rates does not substantively change the content of the bill. But it does allow taxpayers to better understand the reasons their taxes change from one year to the next. We now compare the old and new statements, starting from the top of the new statement and working our way down. Panel 1 of the new statement shows the same information shown along the right-hand column of the old statement. The only difference is that the new statement reports the exemption in terms of EAV, rather than in dollars subtracted from the property’s tax bill. Property tax rates do not appear anywhere in the new statement, but they can be calculated from the information on the new statement. Panel 2 reports the property’s tax share. This is neither reported on the old statement nor can a taxpayer calculate it from the information on the old statement. Panel 3 reports the extensions and tax bases of all taxing jurisdictions in the City of Chicago, except TIFs and SSAs. This information is also not reported on the old tax statement, and cannot be calculated from information on the old statement. Panel 4 reports the tax payments due from this property to each taxing jurisdiction. This is the same information reported in the center panel of the old tax statement, but the new statement omits the tax rates. Panel 5 provides a simple analysis of the change in this property’s tax liability from, in this illustration, 2008 to 2009. First, it gives the dollar amount of the change. Then, it reports the tax share effect and the tax extension effect. * Cook County Treasurer Maria Pappas revealed a new property tax statement days before this chapter went to press. Our understanding is that although the new statement differs from our proposal, it also increases taxpayers’ ability to monitor their governments. (Chicago Tribune, January 26, 2013) Institute of Government & Public Affairs • igpa.uillinois.edu 37
Page 1 and 2: The ILLINOIS Report 2013
Page 3 and 4: Foreword The University of Illinois
Page 5 and 6: The Illinois Report 2013 Table of C
Page 7 and 8: falter or their wages fall. Herring
Page 9 and 10: Giertz After the Great Recession, W
Page 11 and 12: small step toward resolving the lon
Page 13 and 14: Dye Merriman Hudspeth Crosby And Mi
Page 15 and 16: In November, Democrats won a superm
Page 17 and 18: New revenue. Although new revenue s
Page 19 and 20: After 2014, the temporary tax incre
Page 21 and 22: for many other budgetary priorities
Page 23 and 24: Table 1 Summary Statistics for Illi
Page 25 and 26: percent. New Government Accounting
Page 27 and 28: C H A P T E R 3 T H E I L L I N O I
Page 29 and 30: $23.4 B I L L I O N Amount local go
Page 31 and 32: If the taxing district has unfetter
Page 33 and 34: extension from increasing by more t
Page 35: Figure 1 Individual Tax Payments Ar
Page 39 and 40: Figure 4 “Old” Property Tax Sta
Page 41 and 42: Herring Life at the Edge: Precarity
Page 43 and 44: 2009. Again, as Figure 1 shows, by
Page 45 and 46: Figure 4 Percentage Believing Their
Page 47 and 48: insecure. Young adults are less lik
Page 49 and 50: Abner Gordon Differential Response
Page 51 and 52: Differential response interventions
Page 53 and 54: Figure 1 Illinois DCFS Pathways to
Page 55 and 56: finishing RCTs. Ohio is doing an ex
Page 57 and 58: more positive feelings after the in
Page 59 and 60: to the extent that more families ar
Page 61 and 62: Kaestner Lo Sasso Public Policies t
Page 63 and 64: in the quality of care provided by
Page 65 and 66: consider the NFP hospital located i
Page 67 and 68: Certificate of Need Regulation Cert
Page 69 and 70: C H A P T E R 7 T H E I L L I N O I
Page 71 and 72: One component of the study was a pu
Page 73 and 74: 18 Number of U.S. House Seats that
Page 75 and 76: Figure 1 Normal Vote Distributions
Page 77 and 78: District of Columbia) that he won h
Page 79 and 80: Table 1 Who Drew the Maps? Redistri
Page 81 and 82: A B O U T I G P A T H E I L L I N O
Page 83 and 84: training, and informed consultation

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