April 14, 2010


Build an ark. A deluge is imminent.

Owners of Chicago and suburban residential real estate can expect a hefty property tax increase when the second installment of the 2009 bill is issued later this year, probably after the Nov. 2 election so as to minimize voter fury, and then for several years thereafter.

My prediction: The increases will be in the realm of $600 to $1,500 per parcel. That means home or condominium owners, who already paid 55 percent of their 2009 tax bill as the first installment of this year, can anticipate at least another grand for their second tax payment.

The blame game is already under way.

"It's the 'Houlihan Hoax,'" asserted Joe Berrios, a Board of Review commissioner and the county Democratic chairman who is the 2010 Democratic candidate for Cook County assessor. Berrios said that incumbent Assessor Jim Houlihan's "lack of transparency" and "failure to adjust tax bills to reflect declining market value" will result in substantial tax hikes. "It's sheer incompetence," he said.

"Commercial (property) owners will get (assessed value) reductions" at the Board of Review, since they have the money to hire the lawyers to get the appraisals to prove a reduction in market value, Berrios said. "Taxes are rightly based on market value." Adds Berrios: "Home owners are less likely to understand their tax bill, and don't appeal."

"The (assessment notice) should inform the owner of the property's fair market value, not assessed valuation, and there should be a cap on increases," Berrios said.

There are 1.8 million parcels in the county, of which 1.2 million are residential. If the owners of 600,000 commercial properties pay less, the residential owners pay more.

Specifically, Berrios calls the so-called "25/10" plan passed by the Cook County Board in 2009 a "hoax." Before that the assessor's assessed valuation was 16 percent of market value for residential property, 20 percent for apartments and 38 percent for commercial property. Houlihan's proposal, sponsored by county Commissioner Forrest Claypool, reduced the assessed valuations to 10 percent, 16 percent and 25 percent, respectively. "But that won't cut taxes," Berrios said. "It's meaningless. The assessor has to cut market value, and he hasn't done it."

"It's the culture of insiders, the culture of corruption," said Claypool, a Democrat who is running as an independent for assessor in November. "That must end."

As a Board of Review commissioner, "Berrios solicits contributions from lawyers who handle commercial tax appeals before the board, after it reduces their clients' taxes," Claypool said. "It's pay to play. Property taxes will increase, and it's because the board has approved reductions for commercial properties, thereby passing the burden to residential owners."

Claypool charged that Berrios' election would "turn the clock back."

"There will be no reform," he said. "The insiders will get lower property taxes, while everybody else will pay more."

Can Claypool beat Berrios? Here are several salient facts:

First, Berrios has a lot of baggage. Despite his party clout and $1 million campaign budget, Berrios won the Democratic nomination for assessor with an anemic 39.2 percent of the vote in the Feb. 2 primary, topping Robert Shaw by 26,242 votes. Shaw, who was backed by the black committeemen, got 34 percent of the vote, and former judge Ray Figueroa, who ran as a "reformer," with all the major media endorsements, had 26.8 percent.

There is a Republican on the ballot, Sharon Strobeck-Eckersall, an utter unknown. She will get 20 percent of the vote, but given Claypool's visibility and reputation, he definitely will threaten Berrios in a three-way race. Claypool has an 8-year record of opposing tax hikes and wasteful spending on the county board, was formerly Mayor Rich Daley's chief of staff, and worked for Pat Quinn when he was a Board of Tax Appeals commissioner in the 1980s. Claypool also was an acerbic critic of Todd Stroger, which may not have ingratiated him to black voters, although he has been endorsed by U.S. Representative Jesse Jackson Jr. (D-2).

"(Berrios) is beatable," Claypool said. If the 60.8 percent anti-Berrios majority in the primary, consisting of white liberals, blacks and almost half of Hispanic voters, backs Claypool, then Berrios is toast.

Second, Claypool has to secure in excess of 25,000 signatures on his nominating petitions, to be filed by June 21. Since Claypool failed to vote in the Feb. 2 Democratic primary, he is eligible to seek office in 2010 as an independent. However, any circulator who passed petitions for Berrios, Shaw or Figueroa is barred from passing for Claypool; those who signed the petitions likewise are barred from signing again.

There is some speculation that those who voted in the primary would be precluded from signing. You can only vote in one party's primary per election cycle, and signing an independent's petition to get on the ballot is akin to a nominating primary. "That's absurd," Claypool said. "People have 1st Amendment rights. He's not going to defend his record. He's going to use thug tactics to keep me off the ballot."

Third, Claypool avers that he is "the unconventional candidate" in a year when voters are repelled by fiscal chaos, endemic and endless corruption, and incompetent officials. "If voters want a change in Cook County, I'm it," he said. "The mere possibility of making Berrios assessor is an insult not only to Democratic voters, but to all voters."

Berrios views Claypool differently. "He's selfish," he said. "He's opportunistic, and he will damage the Democratic Party and all our candidates." The presumption, at least in Cook County, is that angry and disgusted voters are non-voters, since Republicans present no viable alternative. But Claypool could energize them, bring them out in November, and propel 100,000 votes to the Republican opponent of every ethically tarnished Democrat on the ballot. Or, he could so poison regular Democrats about their slate -- and particularly Berrios -- that they just won't vote.

"He's going to defeat Alexi (Giannoulias) and hurt (Pat) Quinn," Berrios predicted.

Curiously, Republicans have the opposite opinion: They think all of Claypool's voters will support a Democrat for every other office.

Fourth, it's going to get nasty. Berrios has ridiculed Claypool as "desperate for a job." Claypool didn't run for county board president because he was immersed in his new health care company, Rise Health; then he opted not to submit his name for lieutenant governor; now he's running for assessor. "His company's a failure, Quinn didn't want him, and his real goal was to run for board president," Berrios said. "But (Toni) Preckwinkle won (the primary), she can't be beat, so he's running against me." Berrios said Claypool will raise $2 million.

Au contraire, states Claypool. "My company was a success," he said. Now, a year later, he's ready to return to the political wars.

And fifth, there's the "Chicken Little" factor. Both Berrios and Claypool are predicting that the sky will soon fall.

Spending for every government unit is stable or increasing, not decreasing. Revenues from sources other than property taxes are declining. The 7 percent cap on property tax hikes has been eliminated. "That will add $600 to every tax bill," Berrios predicted.

Property values continue to collapse -- residential values are down by 30 percent and commercial are down by 52 percent in the past 5 years. Approximately 35 percent of Cook County's homes have mortgages that exceed their value, and there were 60,000 foreclosures filed in 2009. There will be 400,000 appeals filed with the Board of Review in 2010, about half being commercial.

The bulk of the commercial property appeals will be granted, because the properties' actual market value is less than the assessor's market value, Berrios said. If we don't reduce the assessed valuation, "the owners will file for judicial review and in 2 years they'll get back their overpayment," he said. Since 75 percent of all tax revenue is derived from commercial and industrial properties, not residential property, any diminution of the former is borne by the latter.

"That's just not true," Claypool retorted. "The problem is that government is spending recklessly and the Board of Review is cutting taxes for their clout-heavy friends. That must end."

The outlook: A true "independent" has never before run for countywide office. There were Harold Washington Party candidates in the 1990s, and there are Green Party candidates now. But Claypool enters the contest with three advantages.

First, the news media will wax ecstatic about Claypool and demonize Berrios. Second, assessor will be the only truly contested race, absorbing voters' attention. And third, Claypool will have the money to be competitive.

My prediction: Turnout will be 1.4 million, and Claypool will sweep the suburbs and get half the Republican vote. The key is Cook County's 600,000 black voters: Will they support a Hispanic candidate? Will black committeemen exert themselves for Berrios?

Berrios is 2010's Humpty Dumpty. If he doesn't knock Claypool off the ballot, Claypool will knock him off the wall. Slight early edge to Claypool.