by Mike Kroll

Last year's property tax season was an absolute mess in Knox County. The entire process was delayed by months with the result being delayed payments to the property tax supported government entities. These delays were more than just an inconvenience, the need to borrow money, either internally or externally, cost each of the affected entities thousands of dollars. These delays were accompanied by numerous protests including Maytag rubbing salt in our wounds. Well, Maytag is about to take another swipe at us. Even as the company is advertising the 850,000 square foot warehouse for sale at $8 million they are protesting their assessed value, claiming a market value of just $2.1 million! Meanwhile they are also protesting that the plant isn't worth the $8.56 million assessed market value, asserting $3.771 million instead.

When the process was finally completed everyone was assured that such a debacle would never occur again. However, here we are the very next cycle and once again the process is already delayed to such an extent than neither City Assessor Darrell Lovell, County Treasurer Robin Davis nor County Clerk Scott Erickson expect this year's property tax bills to go out on time. All three agree that this year's delay should be less than last year's but also that "there is absolutely no excuse" for delays that once again are occurring in Supervisor of Assessments Joyce Skinner's office.

However, simple delays will not be the end of property tax problems this year. The equalized assessed value of Knox County properties will also be down this year, possibly by hundreds of thousands more dollars than projected by Skinner. According to Lovell, "There is absolutely no doubt in my mind that the EAV will be down this year. That will be a problem, but not nearly as big a problem as it could have been had the local real estate market not improved during the latter half of 2004." Lovell says that by mid-year last year he was looking at an overall drop in property values of about five percent but by year end the market improved for an average loss of only three percent, but that is still double the -1.5 percent correction factor or multiplier Skinner is applying county-wide. "When I talk to other assessors around the state they are all familiar with Galesburg's tale of woe and sympathetic as we are one of very few counties with a negative multiplier as the real estate market is improving just about everywhere else," commented Lovell.

The EAV is the value used to calculate property tax rates sufficient to meet the levy demands of the tax supported bodies. Every year as part of their budgeting process cities, schools and other bodies calculate the amount of funding they require from property taxes. This total is applied to the EAV to determine the applicable tax rate, subject to statutory limitations, and the sum of these rates determines applied to the assessed value of your property determines your property tax bill.

Complicating this process are two more developments that are guaranteed to reduce the EAV, changes in Illinois property tax law and a flurry of commercial property owners protesting the assessed value of their properties. In some cases these protests are obscene.

In August of last year state legislators passed a bill increasing the maximum tax exemption property owners can claim on their principal residence from $3,500 to $5,000. The amount property owners can claim exempt following a home improvement project was also increased, as was the number of senior households that can freeze their property’s assessed valuation. This year homeowners making improvements can prevent up to $25,000 of such improvements from being added to their homes assessed market value, that is up from $15,000. Last year property owners over 65 with incomes less than $40,000 could freeze the assessed value of their home, this year that income limit goes up to $45,000.

Most of the substantial property tax protests are within the City of Galesburg Township encompassing most, but not all, of the city. City Assessor Darrell Lovell said Monday, "The deadline for filing protests is now past and I have a total of 34 protests, 17 residential and 17 commercial or industrial, but the inappropriate manner in which some of those protests were filed may result in some protests being disallowed." Among the properties for which protests have been lodged include Butler Manufacturing, Seminary Manor, Seminary Estates, Hawthorne Inn, Big Lots, Econofoods, Dollar General, F&M Bank, Beck Oil, K-Mart, Hy-Vee (East Main Street) and the Mobile Mart at the corner of Fremont and Seminary Streets.

Many of these protests are claiming dramatic reductions in the assessed market value of their property that will combine to lower the total assessed valuation for tax purposes by millions of dollars if they prevail. Over the next few months the Knox County Board of Review will conduct hearings on each protested assessment and historically have typically negotiated substantial reductions on commercial or industrial properties rather than challenge their proposed appraisals. Lovell has frequently counseled that they fight back through third-party assessments of their own to counter the common low-ball values presented by protesting property owners. "In every case where we have hired our own qualified appraiser that investment has been more than returned by maintained assessed values," said Lovell.

"Many of these claims are simply outrageous," continued Lovell. "And most people don't understand that frequently the challenge isn't initiated by the property own but by lawyers or appraisers on a contingency fee basis. These guys make money as a percentage of savings they gain for the property owner and have everything to gain by low balling their proposed reappraisals. A good number of those we are dealing with this year originate with a single Peoria attorney who hasn't even followed the rules in filing his protests. I am arguing that the Board of Review should consider throwing his protests out on that basis."

That attorney, Robert McQuellon, sent a single letter to Lovell on February 11th listing 14 properties whose assessed values he is protesting. What McQuellon did not do, as specified by the Board of Review procedures, is complete separate protest forms for each parcel including both a proposed new value and evidence to support that value. Protesters are also asked to discuss the issue personally with the township assessor involved to see if some kind of reasonable adjustment can be worked out short of a formal protest hearing. According to Lovell none of this was done by McQuellon.

"I am very pleased that the Knox County Board voted to finance our own appraisals of many of these properties," said Lovell. "I am very confident that all of the tax bodies affected by the protests will gladly participate in sharing the $12,000 cost." Skinner recommended Robert Edwards, an appraiser from Peoria, be hired to counter the appraisals being produced by those protesting their property’s assessed value. On February 10th the Knox County Board voted unanimously to hire Edwards and Lovell is convinced it will be money well spent.