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Error in assessor’s office results in change to Cook County tax estimates

The tax rolls for Cook County and local government became more complicated with a discovery in the final week of 2020.

Cook County Assessor Bob Thompson informed County Administrator James Joerke on Dec. 29 that an error occurred in the collection and processing of data related to dozens of commercial properties and the taxes they are required to pay.

Joerke told the Cook County Board of Commissioners during a meeting Jan. 12 that Thompson notified him that an error in the transposition of spreadsheet data related to the valuation of 36 state-assessed commercial properties had resulted in a miscalculation of tax revenues for those properties. The actual tax revenue that will be collected on the 36 parcels is $177,000 less than originally anticipated, Joerke said.

This left the county board with a choice for how to make up $177,000 for this year’s budget. Commissioner Ann Sullivan suggested dividing the difference between local taxpayers and the county’s reserve fund. Sullivan and Commissioner Ginny Storlie supported the notion of taking $100,000 from the fund balance and distributing the remaining $77,000 across the entire tax base, commercial and residential properties included.

For a person that owns a home valued at $200,000, this change would result in an approximate increase of $6 per property, according to Auditor Braidy Powers.

Commissioner Stacey Hawkins had another approach, suggesting that the county department heads reevaluate their expenses for the upcoming year and reducing costs by any means possible. A one percent reduction from all departments could alleviate the immediate impact on local taxpayers, Hawkins suggested. As she explained her approach, Hawkins said adjustments could be made at various departments by, for example, offsetting planned expenditures for 2021.

After a significant amount of discussion on the topic, the commissioners voted 3-1 to make up the deficit by taking $100,000 from the county’s reserve fund and distributing the remaining $77,000 across the entire tax base. Hawkins was the lone vote against the proposal.

In practical terms, the commissioners’ action reduced the levy by $100,000. They approved a final levy of 10,776,801 on Dec. 22. The county board reduced that levy today to $10,676,801 by authorizing the use of $100,000 of fund balance, Powers said in a statement sent to WTIP Jan. 12.

The effect of that $100,000 levy reduction on a taxpayer with no change in valuation or classification is that their county taxes will not increase, according to Powers.

The error did not affect the levy, but it did increase the tax rate. Without the reduction in the levy approved today, taxpayers with no change in valuation or classification would have seen an increase in county taxes of about 1 percent compared to last year, Powers said.

Prior to the vote, Joerke explained the situation to the commissioners, noting several factors that contributed to the error. In 2020, Joerke said the Minnesota Department of Revenue (DOR) provided counties with its assessed values of commercial properties in a new format that listed both the total estimated market value and equalized market value for each parcel. The reporting form that DOR used in previous years listed only the equalized market value, which is the value that counties must use in calculating the tax base.

Staff in the assessor’s office transposed total estimated market value data into a spreadsheet that was provided to the auditor/treasurer’s office to calculate 2021 tax revenues, Joerke explained, resulting in a miscalculation of the revenue that would be collected. Changes in assessments related to the reclassification of privately-owned vacation rentals as commercial property made the erroneous data harder to detect, according to the county administrator.

Furthermore, Joerke said the assessor’s office was short-staffed in August 2020 when the error occurred. There was insufficient review of the assessment data before it was provided to the auditor/treasurer’s office.

Thompson spoke to the commissioners about the error during the meeting Jan. 12. The audio below is Thompson explaining the situation to the Cook County Board of Commissioners.