CUED

A Comparative Analysis of the Tax Base of the Commercial Avenue Special Service Area for Two Assessment Periods: 1979-83 and 1983-85

The SSA was formed by a city ordinance in December 1983. The area is Commercial Avenue from 87th Street to 93rd Street, and the first block east and west from Commercial Avenue on 91st and 92nd Streets. It is comprised of 226 tax parcels. The SSA was set up as a financing mechanism for improvements in the designated area. Every year for a ten year period, each of the tax parcels in the SSA are taxed 3% of their equalized assessed valuation over and above their regular rate. This tax money is put into a fund managed by the South Chicago Economic Development Commission (SEDCOM) and overseen by five designated commissioners. The SSA income for improvements varies with the assessments in the SSA. For this reason, the commissioners asked CUED to look at how the tax base had changed between the last two assessment periods (1979-1983 and 1983-1985) to aid them in their fiscal planning for the remaining years of the SSA designation, which expires in 1993.

The major findings of our research are as follows:
1. The county assessment for the entire SSA declined 3% between 1981 and 1985. The difference was a $118,232 drop in the county assessed valuation of properties within the SSA area. Although 124 properties increased in value by $396,806, it was not enough to offset the decreases in 77 properties of $515,038.
2. The Equalized Assessed Valuation (EAV) for the entire SSA decreased by 7.4%, or $544,999, between 1981 and 1985. This happened because the county assessment of the SSA properties decreased and the state equalization factor also decreased for the first time since 1940. However, for the 1986 taxes the state equalization factor increased 1.15 % from 1.8085 to 1.8293. This should help boost the SSA revenues in the coming year.
3. Since the EAV is the base by which the 3% assessment is made for the SSA Commission, the EAV decrease has meant a decrease in revenues for the SSA. In the two assessment periods we examined for this study this has meant a decrease of $16,349 as possible yearly income for the SSA.
4. The major factor in the overall decline of the SSA county assessment was the decrease in the property assessment of the Goldblatt tax parcels. The Goldblatt tax parcels account for $212,611 or 41% of the $515,232 total SSA county assessment decrease in property values.
5. Seventy-one tax parcels, 31% of the SSA, have had one or more years experience with tax forfeiture since 1979. The properties north of 90th Street have had more tax forfeiture problems compared to properties south of 90th Street.

To understand how we derived the above findings and to interpret the data included in the appendices and supplemental map book, it is necessary to understand some things about the Illinois tax system. In the following sections the different elements of the tax system will be discussed and how these elements are interrelated and affect the SSA tax base. The sections are as follows: County Assessment, Equalized Assessed Valuation, Tax Rate, Forfeitures and Sales. The last section, Concluding Remarks, will discuss the implications of our findings and different ways the SSA Commissioners can utilize this information in their planning for Commercial Avenue.

This website is maintained by Cedric Williams, Manager System Services,
UIC-Center for Urban Economic Development