June 3, 2009
2010 "BATTLE OF TITANS": HOULIHAN V. BERRIOS FOR ASSESOR

ANALYSIS & OPINION BY RUSS STEWART

It's a prospective "Battle of Titans." It's the past versus the future. It's the 19th Ward Irish versus Chicago Hispanics. It's Hynes versus Madigan.

And it's Round Three in the blood feud between Cook County Assessor Jim Houlihan and Cook County Board of Review Commissioner Joe Berrios.

According to party sources, Berrios, who also is the county Democratic chairman and the 31st Ward Democratic committeeman, and who arguably is the most powerful Hispanic in Chicago politics, is seriously contemplating a primary challenge to Houlihan in 2010.

Houlihan is a protege of Tom Hynes, the former assessor and 19th Ward boss. Berrios is a close ally of Illinois House Speaker Mike Madigan, the state Democratic chairman and 13th Ward committeeman. Both Hynes and Madigan are working assiduously to elevate their offspring -- state Comptroller Dan Hynes and state Attorney General Lisa Madigan -- to higher office in 2010

The Board of Review, formerly known as the Board of Tax Appeals, is empowered to consider complaints from commercial and residential property owners contesting assessed valuations, which are set by the assessor's office. Three commissioners are elected, each from a district encompassing a third of Cook County: Berrios from the Northwest Side 2nd District, Larry Rogers from the black-majority South Side 3rd District, and Brendan Houlihan from the suburban 1st District. All are Democrats.

Round One, in 2006, went to the assessor, who stealthily backed Democrat Brendan Houlihan (no relation) against Republican incumbent Maureen Murphy, who was Berrios' ally on the board. With Murphy's vote, Berrios was chairman, controlled hiring, and set the agenda. In an upset, Murphy lost by 14,076 votes, getting 48.6 percent of the votes cast in a turnout of 476,378. Brendan Houlihan then promptly allied himself with Rogers, ousting Berrios as chairman and demoting his staff.

Round Two, in 2008, went to Berrios, who was challenged in the primary election by Jay Paul Deratany, a liberal Lakefront lawyer who blasted county corruption, tied Berrios to Todd Stroger, and tried to piggyback on the Barack Obama wave. Berrios, with huge margins in the Hispanic wards, triumphed by 153,053-107,889, with 58.6 percent of the vote. The assessor donated $305,000 to Deratany's campaign, which spent $861,938. To defend his job, Berrios spent $226,312.

Round Three is the 2010 primary. According to recent financial disclosures, Houlihan has $545,168 in his campaign fund, and Berrios has $735,233 in four accounts. Since Berrios was reelected to a 4-year term in 2008, he now is in a win-win-win situation: He has the money, he doesn't have to give up his board post, and he will burst onto the citywide scene, emerging as the "Great Hispanic Hope." Plus, with Madigan's backing, Berrios will get a share of the Southwest Side white vote.

If Berrios loses, he will be well positioned for a future city or county race, having eclipsed his Hispanic rivals, U.S. Representative Luis Gutierrez and City Clerk Miguel del Valle, in visibility; if he wins, he'll be able to raise $1 million-plus, and he could be elected mayor.

There is a possibility that Houlihan could opt to run for Cook County Board president, which would clear a path for Berrios. But that seems unlikely, now that county Commissioner Forrest Claypool and Clerk of Circuit Court Dorothy Brown have emerged as the principal contenders for Todd Stroger's job. Should Houlihan enter the fray, he would fracture the white vote and ensure Brown's nomination.

Only in a four-way race -- Claypool-Houlihan-Brown-Stroger -- would the assessor have a chance. If voters want "change" in 2010, they will elect an outsider such as Claypool or Brown, not an obscure insider like Houlihan.

The assessor's task is to assign a market value to the county's 1.8 million real estate parcels, calculate the assessed valuation, factor in spending by local government units, and then issue bi-annual tax bills. The office reassesses 600,000 parcels each year, based on appraisals and sales. But the critical function -- which is why the assessor is known as the Democratic Machine's "breadbasket" -- is to internally handle appeals after notices of proposed assessed valuations are mailed in early January.

Then, commercial and industrial property owners engage their clout-heavy lawyers, submit a contrary appraisal, and get their assessed valuation slashed, saving thousands of dollars. And, thereafter, they and their attorneys make the appropriate campaign contribution.

Since the assessor's office was created in 1932, only six men have held the job, the most enduring being John Clark (1934 to 1954), P.J. Cullerton (1958 to 1974) and Hynes (1978 to 1997). In 1974, enmeshed in scandal, Cullerton, from the Northwest Side 38th Ward, successfully passed the office on to his protege, Tom Tully, who withstood a vigorous challenge from Ed Vrdolyak. But Tully retired after just one term, and Hynes, then the Illinois Senate president, with unified South Side support, mustered enough votes to edge Northwest Sider Ted Lechowicz at slatemaking.

"There's no way the 19th Ward will ever give up that job," said one Democratic politician, who noted that Cook County Sheriff Tom Dart comes from that ward, as did Mike Sheahan, who was the sheriff from 1990 to 2006. "It's all about Danny," added the politician, referring to Dan Hynes. Controlling the assessor's job, he said, enables Hynes' ward organization to raise money, and the sheriff's job enables them to field precinct workers. They'll hang on to those posts "until Danny is governor or senator," he said.

Tom Hynes, it should be remembered, was one of the few Chicago committeemen to back Rich Daley for mayor in 1983. They served in the state Senate together, and they are long-time allies. The mayor surely will intervene to save Houlihan, as he did in 1998, when he pressured Alderman Bill Banks not to mount a primary challenge.

But some Democratic insiders think that Madigan is simply using a Berrios candidacy as a bargaining chip to ensure Tom Hynes' support of Lisa Madigan for governor. In other words, Houlihan gets a free pass, Tom backs Lisa, and Mike supports Dan for attorney general. But the opposite may be true: Berrios could energize Hispanic voters, spur a huge turnout, run in tandem with Lisa Madigan on a "change" platform, and make Hynes focus his money and workers on salvaging Houlihan and Dan Hynes, ignoring the governor's race.

Houlihan, age 66, who was born in the 19th Ward, has had a curious odyssey in Chicago politics since the 1970s: He was an independent-minded Lakefront state representative, but he lost his seat in the 1978 primary. He was an aide to Mayor Harold Washington, and he then returned to his Far Southwest Side roots and became the deputy assessor in Tom Hynes' office. When Hynes resigned in March of 1997, the county board chose Houlihan as his replacement.

Houlihan's advocacy of property tax caps, which limit residential assessment increases to 7 percent a year for 3 years, reached fruition in 2004, when a cap was passed by the General Assembly. It ranks as his major accomplishment. But the cap is being phased out, and Houlihan is searching for alternatives to future increases, such as raiding "excess" tax increment financing district funds or using a portion of the 1 percent sales tax hike to establish a "tax relief fund" to subsidize distressed owners.

But real estate has decreased in value, not increased, since 2006, and voters, already besieged by increases in the county sales tax and possibly the state income tax, are not going to tolerate paying higher property taxes when their home's value is plummeting. Only one-third of the county is reassessed annually, which means that home owners will be taxed on 2007 and 2008 values through 2010 and 2011, and, since home sales have diminished to a trickle, there is scant evidence to support a reduced assessed value.

Last month Houlihan promised that he would lower suburban property tax assessments by 4 to 15 percent effective in 2010.

The second installment of the 2008 property tax bills will be mailed in September and due in October. Expect substantial increases. Anticipate a palpable uproar. Envision a plethora of finger-pointing and scapegoating, as politicians try to pin the blame elsewhere. And, unless Houlihan has a plan or program in place to reduce property taxes commensurate with reduced property values, he will be a tempting scapegoat.

But much depends on how Berrios, age 57, packages himself. The Board of Review has the power to arbitrarily cut assessed commercial valuations, based on such criteria as vacancies, business losses or obsolescence. Berrios raises his money from the businesses and their lawyers who appear before him. It's not pay to play; it's play first and then pay -- just like Houlihan.

To term Berrios a reformer is like calling George Bush lovable. If Berrios wins, it just means the 19th Ward boss is out and the Hispanic boss is in. Berrios does not want to change how the assessor's office works; he just wants to make it work for him.

Voters are, gullible, however. Here's my prediction: The next assessor will be the guy who spends $2 million to $3 million on media ads, sternly promising to reduce property taxes.