THE LOOP — City property-tax bills going out this summer will rise about 1 percent, but will also reflect money diverted to local TIF districts for the first time.
Cook County Clerk David Orr released tax rates for second-installment bills Thursday that will go out at the end of the month and be due Aug. 1. Chicago's entire tax levy will rise $45.9 million, or about 1.3 percent, thanks almost entirely to a Board of Education increase of 2.53 percent from $2.23 billion to $2.29 billion.
"The Board of Education is the big reason for that increase," said Bill Vaselopulos, Orr's director of real estate and tax services.
Some tax bills may rise as much as 2 percent, while others rise less than 1 percent, depending on whether a property is in an area with new construction or an expiring Tax Increment Finance district, both of which would add revenue to tax rolls, meaning individual homeowners would face less of an increase. The clerk's office estimated that most bills would increase 0.5 to 1.5 percent.
"It's a case-by-case basis," Vaselopulos said.
Changes in assessments can also alter bills, but Orr's office was concerned with tax rates and TIFs on Thursday.
Tax rates don't change the total amount of money levied.
"This doesn't involve municipal government at all," Vaselopulos said. But they rise to produce the same amount of revenue given declining property values. The city's composite tax rate rose 6.8 percent for the 2013 tax year being levied with the second-half installment this summer to account for the equalized assessed value of all city property dropping 4.4 percent.
Orr said he was especially proud to be able to provide homeowners with the exact amount of money diverted to TIFs from each billing. About 12 percent of county properties are in a TIF district, a development tool that freezes taxes at a certain level and diverts any increases beyond that to funds that can be used for capital improvements in the district. In the city, more than 20 percent of properties are in TIF districts.
Last year, according to Orr's office, the city raked in $457 million from 154 active TIF districts, money not included in the annual Chicago budget.
"We've been working on this for years," Orr said, since U.S. Rep. Mike Quigley (D-Chicago) first suggested it while a Cook County commissioner. But the complexity of the system prevented it until now.
"Some taxpayers may appreciate that change," Vaselopulos said. "Now you'll see where your money is really going to."
Ald. Bob Fioretti (2nd) expected that to spur calls from taxpayers for more accountability in how TIF funds are spent.
"We have had no actual TIF reform," Fioretti said, even though Mayor Rahm Emanuel ran on a pledge to rein TIFs in. "It's still a slush fund. It has very little accountability.
"We need to examine whether these TIF programs should still exist," he added, calling it a "shadow budget."
Emanuel's Press Office did not immediately respond to requests for comment.
Emanuel and other politicians have warned of an approaching $600 million "pension cliff" in payments due this year to retirement funds for police officers, firefighters and teachers. If the city were forced to budget for that increase, it wouldn't show up in property-tax bills until a year from now.
"The 2014 year could see an increase," Vaselopulos said. "That's for the city to decide."