ROCKFORD — Every year, home and business owners across the county argue that their properties aren't worth as much as assessors say they are.
Yet as property values increased for the first time in eight years, Winnebago County saw the fewest assessment challenges in nearly a decade. Even so, there are still disputes over property values that could affect your property tax bill. That's because each time a large reduction is granted — and this year there were fi ve businesses that wanted their values cut by more than $1million — the rest of the taxpayers make up the difference with higher rates.
For the 2016 tax season, 2,108 property owners challenged their assessments, the fewest challenges since 2007, when there were 1,996. Winnebago County Supervisor of AssessmentsTom Walsh said the decline occurred partly because 2015 was a general assessment year, meaning assessors evaluated all property and made more individual changes based on deeper neighborhood-by-neighborhood analyses of property values.
Although thousands of homeowners protest assessments, it’s businesses that have the biggest potential to dent the tax base. The 10 largest reduction requests account for $17.5 million of this year’s $43 million in reduction requests. That means more than 40 percent of the value that could be reduced comes from just 10 businesses.
Those requests are heard by the Winnebago County Board of Review, starting with those seeking a reduction of $100,000 or more. This year the board heard 150 cases in which the requested reduction was at least $100,000 — a total of nearly $26 million.
Every time a reduction is granted, the rate used to calculate property taxes for the county goes up. That means that if a large amount of money isn’t being paid by a big business, it is being split up among, and paid for, by homeowners and other property owners.
Gary Anderson, of Gary W. Anderson and Associates Architects, said the value at whichWinnebago properties are assessed is already too low, and that comparable properties in other cities are sometimes valued at double what Rockford’s are.
“If you grant one, you create a domino effect,” Anderson said. “Low values transcend into the marketplace, and that’s just not a healthy economy.”
The three-member board analyzes housing-value data and listens to arguments from the county and the businesses. If the board determines that the assessed value is correct and issues no reduction, the company can appeal to the Illinois Property Tax Appeal Board.
Of the 10 largest challenges for 2016, eight businesses are in the appeals process at the state level for requested 2015 reductions and three for 2014 reductions. If any of those appeals are granted, the county will have to pay back each business based on the size of the reduction, driving up the tax rate.
“When they appeal to the state level the tax base is diminished and the tax rate increases for everyone else,” Walsh said. “So small property owners will pay at a higher rate than they should if those unfair reductions are granted. If property owners pay a few dollars more, that is significant and we don’t think anyone should pay an unfair amount.”
But how many reductions would have to be granted for you to see an increase on your tax bill? Just one.
In 2010, Mondelez received a $1.6 million reduction to the assessed value of its gum factory onForest Hills Road. According to information from the Winnebago County Clerk’s office, if that same reduction were granted today using the 2015 tax rate — the 2016 rate has yet to be determined — the owner of a $100,000 home would pay an additional $21.42 in property taxes. If all 150 of this year’s requested reductions of $100,000 or more were granted, that number would increase to $76.06 for the same house, again, using the 2015 tax rate for TaxCode 1, the code that determines the rate for most property owners in the city of Rockford.
Atop the list of 2016 challengers was Beloit Health System, owner of NorthPointe WellnessCenter, which sought a nearly $7.4 million reduction in the assessed value of its property. The assessed value is one-third of the fair market value of a property, and North Pointe’s request accounts for a 66 percent reduction of its assessed value of $11.1 million. However, the healthcare company reached a settlement for a nearly $2.4 million reduction in its assessed value.
New to the top 10 this year were LDK Leasing and Harrison Street Investors. LDK leasing owns TH Foods, which sought a $5.3 million reduction in its assessed value, while the Harrison Street property, which houses Larson & Darby, requested a nearly $8 million reduction.
—Kayli Plotner: 815-987-1391; kplotner@rrstar.com; @kayplot