Evaluating inconsistencies in assessment regressivity across property classes

Abstract We investigate inconsistencies in property tax assessment regressivity across property classes using public record data from Cook County, Illinois during 2006–2022. Across a battery of tests, we document that assessment regressivity is severe within Class 3 (large residential), Class 5A (commercial), and Class 5B (industrial), whereas assessment ratios are only marginally regressive within Class 2 (small residential). Property Classes 3, 5A, and 5B are significantly more likely to appeal, have successful appeals, and have greater value reductions following a successful appeal, compared to Class 2. The appeal process acts to further exacerbate regressivity within Classes 5A and Class 5B. We calculate the counterfactual tax rate that could have been applied under the hypothetical scenario of zero regressivity within each property class and assuming that assessment ratios equal official assessment rates. The weighted average tax rate across jurisdictions in Cook County during 2006–2022 is 7.8% and the counterfactual tax rate we calculate that produces the same property tax revenue under the above conditions would have been 6.1%.