Equalization factors balance taxpayer inequities

By Brenda Matherly

With property tax season upon us, and the connection to property assessments, it’s a good time to discuss property assessment equalization factors. Many property owners around the state have seen these factors published in local newspapers and might wonder about their origin.

The property assessment equalization factor, often called the "multiplier," is the method used to achieve uniform property assessments among counties, townships and individual properties.  The process of equalizing property is required by law.

However, the equalization factor (multiplier) is not applied by law to farmland, farm buildings or coal rights, which are assessed using alternate assessment methods specified in Illinois law.   

Under the Illinois Property Tax Code, property in the state should be assessed at 33 1/3% of its full value. However, assessment levels may vary from that percentage within the boundaries of an assessment area.

These variations can occur for several reasons. Just the local nature of the assessment process alone can create variations among properties. Consider the large number of local assessing officials who have different opinions about value, then factor in the hoops and hurdles that hinder the process, including pressures to keep assessments low, restrictions on time and resources, lagging valuations and changes in economic conditions.

This equalization is particularly important because some of the state's many local taxing districts overlap into two or more governmental boundaries such as counties, townships and municipalities. These overlapping districts can include schools, community colleges and fire protection districts, just to name a few. If there was no requirement for equalization, the result would be significant inequities among taxpayers with similar properties.

Brenda Matherly, IFB assistant director of local government. (Photo by Catrina Rawson)

As previously mentioned, equalization can happen between townships within a county, known as a township multiplier or intracounty equalization. The township multiplier can be issued by either the Chief County Assessment Officer or the County Board of Review.

Equalization factors between counties are also common. They are known as state multipliers or intercounty equalization. State multipliers are issued by the Illinois Department of Revenue.

In the case of a state multiplier, if the county’s property assessment level is at 33 1/3% of value, the state multiplier will be 1.00. If the property assessment level is greater than 33 1/3% of value, the state multiplier will be less than 1.00. If the level of property assessments is less than 33 1/3% of value, the multiplier will be greater than 1.00.

For example, if assessments in “Sample County” are at 33.31% of value, the county will be issued a state multiplier of a 1.0186% increase that will bring all property (except farm property) up to the statutory 33.33% assessment level. That means a Sample County home valued at $50,000 would receive a new equalized assessed value of $50,930 ($50,000 X 1.0186).

Brenda Matherly serves as IFB assistant director of local government. This article appeared in the latest edition of LINK, Local Information, News & Know-How. To view the newsletter, visit July-August LINK.