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Your School District May Be Fighting Your Tax Appeal

“The district isn’t really fighting for MORE money. It’s fighting for a re-distribution of existing money among property taxpayers.”

Every September, our property tax bills arrive in the mail, and here in Illinois, the question is not whether your property taxes will increase, but by how much. Imagine you get your property tax bill, you believe it is too high, and you decide to appeal that increase, because you have found 5 homes like yours that all pay lower taxes.

Imagine that you lose your first appeal to lower your taxes, and you are now at the Property Tax Board of Appeals (PTAB).  You are ready to plead your case with PTAB, and you find that you are not just facing the Board. You are fighting your school board.

What??

That’s right….your school board, whose job it is to provide first-class education to the children in your district with the portion of your property taxes earmarked for your local school board, is also in the business of fighting its own constituents about the value of their homes.  To be fair, it’s not just your local school boards…..it’s other taxing entities, too. How does this happen?  More importantly, why does it happen?

  • According to the Wilmette Village Manager and the District 39 Superintendent, local units of government intervene in appeals only where (1) the homeowner has lost his or her initial appeal and is now before the board of review, and (2) the amount at issue is over $100,000 in assessed valuation.
  • Local government units defend this decision to intervene by claiming (1) that because successful property tax appeals may result in a refund of some taxes already paid, and because property taxes are a “zero-sum game,” other taxpayers in the taxing district will suffer if the appeal is allowed and taxes are reduced, and (2) if these local governmental entities did not intervene, the County would do an insufficient investigation and “split the difference” with the taxpayer.

District 39 and the Village of Wilmette believe that the Property Tax Board of Appeals cannot do its job on its own and requires the assistance of the local taxing entities to be sure that a fair determination is made about the appeal.  This, despite the fact that PTAB appeals are heard by a professional staff of administrative law judges who are either qualified attorneys or property appraisal specialists.  It would seem that those qualifications fall short in the eyes of our Village and School Boards.

D39 and Wilmette also apparently believe that local taxpayers are wrongfully seeking these reductions. In other words, the intervening governmental entities believe that PTAB is incompetent and homeowners are improperly seeking to reduce their property taxes.  See Ray Lechner, Superintendent of D39 Schools, May 22 Announcement.

This explanation (that PTAB would simply roll over and split the difference) is dubious at best, given that the taxpayer already lost his or her first effort to reduce property taxes and is now at the Board of Appeals.

Because one justification for this intervention is that PTAB would just “split the difference” with the taxpayer (all prior evidence to the contrary notwithstanding), the only way to financially justify this intervention would be if the result of the intervention resulted in a significantly greater financial outcome than the 50% refund already expected at the PTAB level.

In response to a request for a list of all appeals in which these entities intervened, the district produced a spreadsheet prepared by outside legal counsel that established that the average savings to District 39 for each appeal, after accounting for the legal fees spent in the appeals, was approximately $11,000. (Apparently, the District had not previously calculated this savings, as legal counsel was retained to prepare it).

All of these facts lead to a number of observations and necessary conclusions:

  • One would think that those numbers (the actual savings and the attendant legal fees) would already have been prepared by the board.  After all, these appeals pit the school board (and other governmental entities) against taxpayers in the district. One would think that the board would have done this analysis at least once, and preferably on an ongoing basis.

 

  • D39 “saves” an average of $11k/year, meaning what D39 refunds after these appeals is $11k less than the refund would be if the homeowner received the full reduction he or she was seeking.  This “savings” assumes that absent the intervention of the various governmental entities, the Appeals Board would grant the homeowner the full requested reduction.  But, if PTAB (absent intervention) would typically “split the difference” with the appealing homeowner (this was part of the justification for intervention), this would have resulted in an average savings of $9801 to the school board without any intervention.  So, the school board’s intervention in these appeals actually nets it only about $1,000/year if PTAB would have given the homeowner 50% of the requested reduction anyway.

 

  • When the Appeals Board is deciding a case, the homeowner already lost his or her first pitch to reduce the valuation. The Board of Review is there to defend the appeal on behalf of the county, and the taxpayer already lost once, making the assumption that PTAB will just “split the difference” dubious. . . it is more likely that would happen at the Board of Review, where the School Board is not involved, as opposed to on appeal.

 

  • The stated purpose of the participation of the various local governmental entities is a lack of trust that PTAB would come to the right decision on its own.

 

  • The participation of the school board is based in part on an assumption that homeowners are “overshooting” in their reduction appeals, in order to get PTAB to split a bigger baby, so the school board assumes that some of its constituents are being dishonest in these appeals.

 

  • Since the school board (with other local entities) participates in every  appeal involving a reduction of over $100,000, the school board (and other entities) participate even if/when the homeowner is absolutely correct in seeking the reduction.

 

  • The school board and other governmental entities do not participate at all in appeals involving $99,999.99 or less, even if/when the homeowner is absolutely wrong in seeking the reduction – but this arbitrary threshold could certainly change in the future.

 

  • The $100,000 demarcation for appeals in which these entities participate and those in which they do not participate has not changed over the last 11 years, including when home values decreased, and again when home values increased.

 

  • D39 and the other municipal bodies expend time, valuable resources and taxpayer dollars by hiring outside counsel to intervene in these appeals despite the fact the PTAB Board, also a taxpayer-funded body, has already been organized and funded to handle the appeals.  These actions result in double (and sometimes, triple or quadruple) the taxpayer resources spent on such appeals.  Adding the other intervening municipal bodies into the mix, multiple layers of taxpayer money are squandered to usurp the taxpayer-funded PTAB’s job.

 

  • The school board and other entities only go after the higher-value appeals because there has been a determination by the board that the wealthier taxpayers are better able to manage the higher property taxes (otherwise, why draw a line? Property tax lawyers work on contingency).  Dr. Lechner, in his May 22, 2017 statement on PTAB, justifies D39’s intervention as a way “to ensure that these cases ha[ve] a fair and reasonable outcome” and as “an important way [sic] the interest of other taxpayers are considered.”  This thinking assumes that the PTAB appeal process, led by highly qualified property appraisal specialists doing this 24/7, is not fair and, conversely, that D39’s involvement, with zero qualifications in assessing property value, makes it more fair.

 

  • Finally, and most importantly, the School Board (with the Village, and other entities) will get its money regardless. Other taxpayers will absorb the refund if one is made. So the district isn’t really fighting for MORE money. It’s fighting for a re-distribution of existing money among property taxpayers.

 

Based on these facts and necessary conclusions, the school district is gaining approximately $1000 per year by being involved in something that likely creates incredible ill will.  One wonders whether the taxpayers in Wilmette actually want the school board playing Robin Hood, and the lack of visibility about this policy suggests that the school board knows this. School board decisions to intervene in these appeals get buried in consent agendas.  Perhaps our school boards should stick to Reading, Writing and ‘Rithmetic!

Series of emails between resident, D39 and Village of Wilmette