Written by Ron Kingsley, LCA Tax Attorney and Owner
Many clients believe that Lake County has something to gain by over-assessing properties…That it will raise more property tax revenue if properties are over-assessed. Nothing could be farther from the truth! Lake County has nothing to gain by over-assessing properties. This is because Lake County determines the property tax proceeds it needs in a given year without regard to assessed values. It uses assessed values only to determine the amount of property taxes each property owner must pay to meet Lake County's financial needs for the year.
Specifically, the County Clerk reviews the taxing jurisdictions’ budgets (i.e., the money needed to run the schools, libraries, park districts, etc.) to determine the tax rate to be applied to the assessments. Basically, the clerk looks at how much money is needed and then spreads the joy to property owners by way of our tax bills and based upon each property's relative assessed value. For example, if your property's assessed value is .001% of the total assessed value of all properties in Lake County, you will pay .001% of the property tax revenue Lake County needs for the year. If LCA is able to reduce your assessment, the rate for everyone else will be increased to compensate.
Think about it this way. Assume that there are 50 members in a group. The group needs $10,000 to pay its bills and, as the group’s treasurer, I am going to get that from each person; each person will pay $200, or 2%. One member told me that she should only be treated as a half a member because she only joined the group on July 1, and I agreed that she only has to pay $100. However, I still need $10,000, which means everyone else will need to pay $202.04 to make up the difference. (I’ll kick in the additional four cents to get the total to $10,000.) This is a very simplistic example, but the county works in the same way. The county needs a certain amount of money, and it allocates the taxation burden based upon the relative assessed values of the properties in Lake County. When Lake County Appeal wins an appeal on your behalf, your property's assessed value is reduced, and you pay less in taxes, but the other property owners pay more to make up the difference, since the total amount needed is fixed.
The county will get the money it needs from property owners. That is a fact. If you do not appeal and your neighbor does, successfully, then you end up paying a little more. The system in not fair, but this is the only one we have right now. I recommend that you and all of your friends and neighbors appeal to keep your property tax bills as low as possible. Those who don’t bare the additional burden of your reduced tax liability!