by Mike Kroll

Rather than the more typical ten percent increase most Galesburg homeowners discovered this property tax season, one resident's bill went up 246 percent. And Leroy Foster and his wife Helen are hopping mad. During the 1999 property tax year, paid last summer and fall, the Fosters' total tax on their home came to $734.62 but their 2000 property tax bill, paid this summer, was a whopping $1,807.54!

The Fosters moved to Galesburg in October 1999 after spending the last 22 years in Arkansas. Leroy, who turned 85 last December, is originally from Macomb but he lived in the Quad Cities during the 31 1/2 years he worked for International Harvester in Moline. Helen has worked most of her life as well. ''We never really retired,'' explained Helen, ''we started a cleaning business when we moved to Arkansas and worked 16 hours a day.''

Foster has already expressed his outrage to City of Galesburg Township Assessor Darrell Lovell, State Representative Don Moffitt and anybody else who will listen. He has even gone out and hired an attorney -- even though he privately admits that there appears to be little he can do. ''I realize now that my problems are largely my own doing but it still doesn't seem fair that the tax laws can let something like this happen at all,'' complained Leroy.

The story is fairly complicated and reflects many of the arcane idiosyncrasies of Illinois tax law but ultimately it appears that everything about the Foster's property assessment is correct. Lovell is sympathetic to the plight of the Fosters but says, ''my hands are tied by state statute, and there's nothing else I can do this tax year.''

The Foster's home is at 7 Chestnut Street, just north of the East Main Street HyVee supermarket. In July 1996 Charles and Gayle Hoots bought the home for $36,000. In October 1999 the house was purchased by Leroy and Helen, but in the names of their children, for $53,500. ''I guess it looks silly now but I originally purchased this home in the names of my children so we wouldn't lose it if Helen or I ended up in a nursing home,'' explained Leroy. ''I have seen friends lose everything they owned to meet healthcare costs and I just don't think it's right that they can make a man give up his home to help pay medical bills.''

Therefore the original sale listed Leroy's son and wife along with his daughter and son-in-law as the owners even though ''it was all my money, every penny of it'' according to Leroy. A garage already existed on the property but it wasn't suitable for Leroy and Helen's purposes and they constructed a large 36 x 24 foot one behind the house and replaced the driveway with new asphalt and a cement apron in front of the new garage. The old garage was eventually uprooted and moved by a neighbor, but only after the new garage and driveway was completed and the property's assessed value adjusted.

This added nearly $13,000 to the property's assessed value and, combined with the 2000 quadrennial, resulted in a property valued by Lovell at $39,930 in tax year 1999 rising to $70,170 the next tax year.

Property taxes are based on an assessment equal to one-third of fair market value. That meant that the Foster's 1999 base assessed value was $13,310. But from this value $3,500 was subtracted in 1999 for Illinois' Homestead General Exemption shown on Knox County tax bills as the ''owner occupied exemption.'' This reduced the 1999 taxable value of the Foster home to $9,810.

The Homestead General Exemption is one of four property tax exemptions available in Illinois. It allows homeowners who apply at the assessor's office and who lived on the property on or before January 1st of the tax year to reduce their equalized assessed value by $3,500. (Leroy and Helen probably shouldn't have received this exemption in 1999 because they neither lived in nor owned the home on January 1st.)

In property tax year 2000 not only had the equalized assessed value of the property gone up $10,080 but Leroy and Helen did not get the owner occupied exemption that they benefited from the previous year. This was because, as of January 1, 2000, the legal owners of the property were the children. On January 29, 2000 Leroy had a quit claim deed drawn up that transferred legal ownership of the property to Helen and himself. This deed was filed with the Knox County Recorders office February 24th. Had Leroy simply used his own name when he first purchased the home in October 1999 or even completed the quit claim deed prior to January 1, 2000 he would have qualified for three out of the four possible property tax exemptions.

The owner occupied exemption alone would have been worth a savings of $270.47 on the 2000 property taxes according to Lovell. In addition, Leroy and his wife could have received the Homestead Improvement Exemption that allows a homeowner to postpone property tax on any increase in the assessed value of the home for four years following a home improvement to a maximum of $15,000. Had Leroy qualified and applied before January 1, 2000, one-third of the $12,980 value of the new garage and driveway could have been subtracted from his equalized assessed value. Lovell says this could have saved the Fosters $350.84 in the 2000 tax year.

Because Leroy and Helen are senior citizens, they would also have qualified for the Senior Homestead Exemption. This is shown on Knox County property tax bills as ''over 65 exemption'' and lowers the equalized assessed value of your home by $2,000 if you qualify and apply at the assessor's office. You must have owned and lived in the home on January 1st of the tax year and prove that you are over 65. Even though the Fosters are clearly over 65 and were living in the home on January 1, 2000 they weren't the legal owner of the property for another 28 days. Lovell says this exemption would have saved the Fosters $154.56 on their 2000 property tax bill.

The fourth and final Illinois property tax exemption is the Senior Citizen Assessment Freeze shown as the ''senior assessment freeze'' on Knox County property tax bills. ''This exemption freezes the assessment of your property but not the tax rated,'' explained Lovell. ''Once you qualify for this exemption the assessed value of your home remains unchanged even though taxing bodies may raise or lower the tax rate.'' To qualify for the freeze you must have owned and occupied the property for two consecutive January 1sts and be over 65. Plus, your household income must not exceed $40,000 during the tax year.

''My accountant tells me that I wouldn't qualify for the freeze based on our income,'' said Leroy. ''But with the economy headed down as it is our CDs and other investments won't be bringing in the same return this coming year and who knows where Helen and I will be.'' Leroy and Helen's lifetime of hard work and industriousness work against them here although for many seniors this income test is hardly a barrier.

Lovell and the Fosters have already completed the necessary paperwork to ensure that Leroy and Helen will benefit from three of these exemptions for the 2001 tax year and beyond. One other wrinkle in this equation is that while the value of the original garage was included in the 2000 property tax bill it will be subtracted from the total property value in the 2001 tax year. This means that the fair market value should decrease from $70,170 to $68,940.

Therefore the 2001 equalized assessed value should be $22,980. From that will be subtracted $3,500 for the owner occupied exemption, $4,540 for the Homestead Improvement Exemption and $2,000 for the Senior Homestead Exemption. Leroy and Helen's 2001 property tax bill should be calculated based on a taxable value of $12,940. Had the 2000 property tax rate of 7.7278 been applied to this taxable value the Fosters would have owed only $999.98. The 2001 tax rate will likelybe higher; Lovell estimates an effective increase of nearly ten percent again, due in no small part to passage of the Nursing Home referendum.

Leroy is still mighty unhappy about his 2000 tax bill. He paid it all in June but continues to believe that the system shouldn't work this way. ''It's just not right! My wife and I bought this home to spend the rest of our days here. We moved to Galesburg to be nearer our family. Sure, we could afford to pay this tax bill this year but many others probably couldn't if they were put in our situation. I really think it would be hard to sell this house for $70,000. Since we have been back we keep hearing about how Galesburg doesn't seem to grow and prosper; well if I were a little bit younger I'd be gone after this experience myself!''

Uploaded to The Zephyr Online September 1, 2001

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