Property assessments are used to figure how much property tax homeowners and other property owners must pay. The assessment is supposed to be about a third of the market value. As most people probably know by now, sale prices of homes are going way up in central Illinois.
“We see sales that are just crazy,” said Normal Township Assessor Rob Cranston. “Every Wednesday we have a sales-ratio-analysis we look at during our staff meeting. Those are the sales that occurred the week before. We'll go weeks without having a ratio in the 30s. They’re all supposed to be in the 30s. They're all in the 20s because the market has gone up, and the assessments haven't gone up to correspond to that.”
Assessors for the 30 townships in McLean County try to fix the imbalance that happens over time. Every four years, they do what's called a "quadrennial reassessment," looking at housing prices and previous assessed values for every property in each township. That's a lot. In the city of Bloomington Township, for instance, there are about 26,700 parcels of property that are not exempt from property taxes.
Because the real estate market has been so very hot this year, the quadrennial reassessment is producing bigger jumps than usual. Assessors ask homeowners not to shoot the messenger when they see the new assessments.
“We have to value to the market. If the market value is high, then assessments are going to seem to go up. As the market drops there'll be more of a decline in values,” said City of Bloomington township Assessor Steve Scudder.
The increase in property values created by the multiplier is 5.99% for Normal Township. In Bloomington, Scudder projects about 6.5%.
There is about $3.3 billion in market value taxable property in Normal Township on $1.1 billion of assessed value, and $6.6 billion in property on about $2.2 billion of assessed value in the City of Bloomington.
We don't yet know the precise increases for this year in Bloomington because the township isn't done with reassessment or appeals, though Scudder said it is in the range of $55.4 million.
In Normal Township prior to appeals adjustments though, new construction property value of $15.9 million plus changes of $61.1 million from the multiplier, produce about $77 million more in new assessed value. Normal assessor Rob Cranston said he hasn't seen property values rise like this in nearly four decades.
“Perhaps back in the 1980s when I was working in Bloomington, we would get multipliers of four, or five or six, because the market was going so robustly. We had to catch up with it,” said Cranston.
Appeals
The assessed value has an impact on the property tax bills of homeowners because it is multiplied by the tax rates among taxing bodies such as schools and municipalities as derived by the levies (in dollars) they ask for. If property owners don't like the assessment and a potential increased tax bill, they can appeal. The Bloomington appeal process hasn't opened yet. It runs from Oct. 26 to Nov. 28. Normal’s appeal filing period has closed, though those cases have not all been heard.
You might expect that with such a big jump in assessed value this year, there would be a lot of appeals from homeowners who don't want to see their tax bills rise accordingly next year. That's not what happened. Cranston said he saw only half the number of appeals that he did last year.
“That was an interesting part of this. The only thing we can figure is that most people understand the fact that the market has been going crazy. And they'd have to look at their assessment, multiplied by three, and say, ‘I really don't think I could sell it for that.’ And I just don't think there's that many people who are saying that,” said Cranston.
He said the exact impact of higher assessments on an owner’s tax bill depends on the size of the levy that each taxing body requests.
“Well, theoretically, not much would happen because as the assessments go up, the rate that the taxing bodies come up with should actually go down as the assessments are up,” said Cranston.
That's not what happens in practice. Cranston said usually the taxing bodies don't drop the rates enough to completely offset the rise in assessments.
“The tax bills end up going up a little bit,” he said.
Some of that increase is because taxing bodies are asking for more dollars to offset inflationary increases in their budgets.
Normal Township saw around 40 new residential homes built last year. Cranston said there were about a half dozen commercial changes, including the Rivian warehouse on North Main Street, a new Jiffy Lube near Meijer, and new apartments finished near the Jewel grocery on Cottage Avenue. There were several smaller commercial changes as well.
As new construction continues to build the overall property tax base in Bloomington-Normal, there's a better chance taxing bodies can spread the pain and keep their tax rates level.
