Reason To Worry–Maywood Property Taxes Among Highest In Nation…But There’s More

By Michael Romain

A recent study by the Urban Institute confirms what every Maywoodian already knows–Maywood’s property taxes are too high. However, knowledge based on personal experience and intuition is one thing; knowledge based on a comprehensive, contextualized comparison of property rates across the United States is something else entirely.

Before delving into the data, some qualifications are in order. First, to conclude simply that a municipality’s property taxes are high doesn’t necessarily say much by itself. For instance, just because a state’s property taxes are high doesn’t necessarily mean that it’s overall rate of taxation is high. Moreover, property taxes, as with all taxes, can’t be evaluated entirely by how high or low they are. The most important test of their effectiveness and efficiency is outcomes. What are you getting in return for your tax? This is the test that Maywood ultimately fails.

According to the Urban Institute study, Illinois now has the second-highest property tax rate in the nation behind only New Jersey. The study, which analyzes self-reported data compiled by the U.S. Census Bureau for its American Community Survey (2007-11), found that households in Illinois paid, on average, about $4,500 in property taxes (or 2.28 percent of the average home value) in 2012. For a striking comparison, Hawaii, the state with the lowest rates, property tax as a percentage of home value is 0.27 percent. In Alabama, the state with the lowest rates in the contiguous United States, it’s 0.46 percent.

Average Property Taxes as Share of Home Prices

Illinois’s high property tax rate, however, is only half the picture, since property tax rates within the state may vary considerably. As the study notes, the rate of property tax variation across counties is due in large part to a state’s laws and its relative “dependence on property taxes versus other state and local revenue sources.” But within states, the variation among counties may largely be due to the county’s relative dependence on property taxes as a source of revenue and aggregate housing values.

In short, municipalities with a high reliance on the property taxes and high housing values will tend to have high property taxes. For instance, this point was born out when I analyzed the property tax rate as a share home value of several randomly selected homes in Oak Park and River Forest, two villages with high housing values and, according to national standards, relatively high reliance on the property tax. The following charts are based on publicly available information. Note that, with few exceptions, these are the tax amounts that remained after various exemptions (i.e., homeowner, returning veterans homestead, senior homestead, etc.) were deducted.

Figure I

Oak Park and River Forest Property Taxes

So based on the limited data above, it would be reasonable to assume that property taxes in Oak Park and River Forest are high–both by Illinois and national standards. But the populations of Oak Park and River Forest have been pretty stable for more than twenty years, a rather strong indicator that, on the whole, these people seem to be more or less satisfied with what they’re getting for their high taxes. And what they’re getting is pretty obvious to their neighbors to the west. Good schools, safe and clean streets, you know, the basics.

Now, compare those randomly selected addresses in the tony suburbs of Oak Park and River Forest with several randomly selected addresses in Maywood and Bellwood–two communities that, like Oak Park and River Forest, rely rather heavily on the property tax, but where, unlike those two suburbs, home values are relatively low.

Figure II

Maywood and Bellwood Property Tax Rates

*No exemptions were applied to this household’s property tax amount.

As Figure II demonstrates, the property tax rate as a percentage of home value seems to be higher in Maywood and Bellwood, both places where home values are very depressed, than in Oak Park and River Forest. So Maywoodians pay higher property taxes both as a percentage of home value and likely also as a percentage of income than our neighbors to the east–indeed than perhaps most places in the country (see graph below)–and we get far less for what we pay.

Average Property Taxes as Share of Home Value Nationally

Among the municipalities in Chicago’s West Suburbs and Proviso Township, Maywood is perhaps the one that relies on property taxes as a share of government revenue the most; the one that allocates the least amount of property taxes to its elementary and high schools and the one that collects the least amount of government revenue from service charges and fees (or money that municipalities get from things like restaurant inspections, parking, building permits and marriage licenses), and sales taxes. This last point is perhaps most troubling, since government revenue from sales taxes, building permits, restaurant inspections and parking is a decent indicator of the health of a village’s economic and business climate.

Figure III: Breakdown of a Typical Maywoodian’s Tax Bill (2012)

Screenshot 2014-01-09 at 3.19.35 PM

Figure IV: Maywood Governmental Revenues By Source (2010) 

Maywood Government Revenues by Source

Source: Village of Maywood Financial Statement, April 30, 2010

Figure V: Percentage of Property Taxes to Municipality v. Schools (2012)

Screenshot 2014-01-09 at 3.29.17 PMFigure VI: Sources of Governmental Revenue–4 Villages

Screenshot 2014-01-09 at 3.30.55 PM

Any would-be savior (whether in the guise of a politician or private citizen) will have to seriously grapple with these structural deficits before making plans and promises. But in the meantime, as serious examination remains stalled, residents of this town will continue to vote with their feetVFP

Screenshot 2014-01-09 at 3.31.06 PM

5 thoughts on “Reason To Worry–Maywood Property Taxes Among Highest In Nation…But There’s More

  1. Very good reporting and great research The Village Free Press has done on their property tax research. Keep up the good work. Thank God ,The Village Free Press exists ! ! !

  2. One very long running problem in Maywood is the correct taxation of properties. There is an unbelievable amount of homes taxed “single family” rates yet has 2,3 or 4 units –often illegally converted in the building. This was brought to the previous administration’s attention numerous times, but the response to it very tepid and many of these properties continue to be undertaxed as multi unit buildings. We all pay the price for that. Many of these properties are owned by absentee landlords as well. If the village won’t make them deconvert, do an audit to at least make sure they are being properly taxed to take the burden off the rest of us that play by the rules and only have one family in the building.

  3. Just got my 2014 taxes for 2nd quarterin maywood. Nearly 19.5% tax rate for a town where crime is high and houses are being sold for dirt cheap but taxed as if we are living in River Forest or Forest Park or Oak Park. What BS. I have to see m 2013 taxes now to see where the jump happened. If I am correct its gone up quite a bit since 2012.

  4. I have a single family home in Maywood cost me $109,000. My taxes are $11,700, I have filed an appeal three times and they have declined every time refusing to lower it. My taxes cost twice what my mortgage is a month I am almost in the process of foreclosure because of taxation alone.

    1. Did you get the new home assessed letter? My value shot up 30K more and I am sweating what taxes will be 2017. Crime shootings have been out of control. These last 2 months on my block there has been maybe 18 bullets shots.. the neighborhood is okay for the fact that one damn house has been the issue. I’m going to sell my home and move someplace else. I love my place but high tax and high crime is B.S.. I’m goinf to the town hall and notch about this just to at least I know I stood up to this.

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