A Benjamin A Week

I am taxed a Benjamin Per Week for living in my home.Image result for a benjamin

Of course, I pay way more than that in taxes, when you factor in income taxes at over $10,000 per year, thousands per year paid in sales taxes and taxes imposed on utilities, cell phones, motor fuel and the like.

The $100, or Benjamin, per week that I am taxed is on my older, post-war middle class split level ranch in the older section of an extremely middle class northwest suburban community somewhere around thirty or so miles outside of Chi-Raq.

Image result for crook county illinois

The second installment of our property taxes were due to the Treasurer of Crook County (often referred to as Cook County by some) on the first of August.  I paid ours about a week earlier, after receiving my second paycheck of July on the 21st.

After paying it and seeing that we paid just a wee bit over $5,200 in property taxes this year, it dawned on me that we pay almost exactly $100 per week for the privilege of living in our little house in our modest lower middle class neighborhood.

I went to the very helpful Cook County Property Tax Portal, which provides a wealth of information even if you do not have your PIN number handy.  I happen to have ours memorized, having checked on it several times per year for the sixteen years that we have “owned” our house.

Below is the last five years of our property tax history per the website:

TAX BILLED AMOUNTS & TAX HISTORY

2016: $5,233.86
Paid in Full
2015: $5,290.06
Payment History
2014: $5,213.93
Payment History
2013: $5,061.93
Payment History
2012: $5,783.60
Payment History

When you add up the past four years, we have paid $20,799.78, which incredibly comes out to $99.9989 per week, or twenty-two cents under an exact hundred per week for the past four years. Adding our 2012 payment of nearly $5,800, our five year total amounts to $26,583.38, which over the course of two hundred and sixty weeks amounts to $102.24 per week.

It is worth mentioning that our property taxes were set to be about $400 higher, or about $5,600 this year based on a valuation of $230,000 by the County Assessor.  However, my wife did a little research and successfully appealed our assessed value, lowering it to about $200,000 even though we would not sell our home for a penny under $240,000.  Homes in our neighborhood are currently selling for more than that, perhaps up to $270,000, but those homes have new floors and fixtures better than what we have.

The “Zestimate” for our home on Zillow is $235,000 although for some reason it lists our home as having two bedrooms rather than the three that we have.  Oh well, I would not sell it for a priced based on a Zestimate, anyway.

OFF MARKET  Zestimate®: $235,771
Rent Zestimate®: $1,800 /mo
Is That A Lot?
Whether or not you consider $100 per week or $5,200 per year of property taxes to be a lot depends entirely on where you live and what type of home you have.
I have relatives who pay much more than that, and others who pay far less.
For an example of more, consider the property taxes paid by my aunt and uncle.  This particular uncle, the only one who I consider my true uncle although he is related to me through marriage, married my father’s sister, rather than by blood.  I have an uncle related by blood who I am not close with at all.
Below are the property taxes that they have paid to Crook County over the past five years, over three Benjamins per week during that time span:
TAX BILLED AMOUNTS
& TAX HISTORY

2016: $17,901.08
Paid in Full
2015: $15,221.51
Payment History
2014: $15,091.20
Payment History
2013: $16,070.17
Payment History
2012: $15,948.74
Payment History

Of course, they have a beautiful house in a fantastic neighborhood. My uncle’s income over the years as a financial executive for a software firm allows him to easily pay these taxes while also traveling extensively, grocery shopping at Whole Foods and even higher end, smaller grocers, taking his daughters (my cousins) on multi-week European vacations, purchasing condominiums in Florida and Michigan and generally purchasing whatever they want to without blinking an eye.

Even though our family is very close with theirs, they have long surpassed being even upper middle class and have attained upper class status.  I happen to have been told what my uncle’s income is, approximately, and according to this September 2016 article on Investopedia, it actually exceeds the $465,000 that it took to be a one percenter in 2014 by statistical data provided by the IRS.

He fell short by more than half of the $1.26 million income that the Washington Center for Equitable Growth estimated it took to be a one percenter that same year, and that number seems more reasonable to me.  Even though $465,000 is a Hell of a high income to a Middle Class Guy like me, I know enough people who are close to that to know that, although wealthy, they are not one percenters.

By the way, if you called my aunt and uncle one percenters or even members of the upper class, my former hippie aunt and uncle would hate you very much and never forgive you.  They are very liberal, very laissez faire, but my uncle also worked like a dog for many years to attain the wealth and success that he has.

My brother is a self-employed attorney and even employs several paralegals to keep the paperwork at his practice moving.  He purchased a nice house within DuPage County about eight years ago, but has since moved out of state and rents the house out.

Take a look at the high property taxes that he pays on his rental house, nearly ten thousand dollars or almost two Benjamins per week.

Installment Base Tax Amount Penalty * Total Paid Date
First Due: 6/1/2017 $4,938.80 $0.00 $4,938.80 5/26/2017
Second Due: 9/1/2017 $4,938.80 $0.00 $4,938.80
Total Base Tax (without penalties) $9,877.60

My best friend was deeded his family house about eight or so years ago due to a confluence of reasons that I will not detail.

His home is valued at $462,000 by the Cook County Assessor, however comparable houses in his neighborhood sell for fifty percent or more higher than that.   Some go for over a million, but those are bigger and nicer than his.

The “Zestimate” on my best friend’s house more closely reflects the potential selling price should he and his wife want to sell the home.

OFF MARKET  Zestimate®: $627,554
Rent Zestimate®: $4,311 /mo
When I once remarked to him how great it must be to live mortgage free, he reminded me that he pays about a thousand per month in property taxes in addition to all the other upkeep costs, which you can see is an accurate statement.
TAX BILLED AMOUNTS
& TAX HISTORY
2016: $11,689.45
Paid in Full
2015: $12,836.52
Payment History
2014: $11,545.00
Payment History
2013: $11,252.42
Payment History
2012: $12,006.66
Payment History

Moving on to a co-worker who I have worked with for over twelve years.  She and her husband both have had six-figure municipal jobs for quite a few years, and purchased a new construction home in a Kane County, Illinois city about fifteen years ago.

On the days when I pay my property tax bill at the local Chase Bank, I always complain to her and anyone else who will listen to me about writing that huge check to the Crook County Treasurer.  My co-worker has very little sympathy, however, reminding me that like my best friend, she too pays about a thousand per month for the privilege of living in their spacious home near the Fox River.

By the way, the Net Taxable Value is actually more like one-third of the property value.  Kane County, like nearly every other in Illinois with the exception of Crook County, considers taxable value to be one-third of the estimated home value.

Also, you can view the tax history going back for ten years on the Kane County Treasurer’s website, which is pretty cool.

Tax History

Year Base Tax Due Net Taxable Value
Current Year 11,828.68 121,875
2015 11,964.38 118,274
2014 11,730.72 114,255
2013 11,075.90 112,253
2012 10,474.12 113,653
2011 9,996.38 119,797
2010 9,849.84 127,916
2009 9,641.02 139,442
2008 9,708.54 145,315
2007 9,037.12 136,841

As you can see, compared to my aunt and uncle’s home, my brother’s rental house and my best friend’s house, and my colleague’s home, my property taxes of one Benjamin per week do not seem so bad.

It’s Lower Out of State
On the flip side, my sister owns a beautiful home in the Uptown neighborhood of New Orleans, just a few blocks off of St. Charles Avenue and about two blocks away from the Tulane and Loyola campuses.
There are many upper middle class and higher residents in her neighborhood, nearly completely white even though New Orleans is fifty-eight percent African American, and there are more BMWs, Mercedes, Land Rovers and Porsches on the street than Fords, Chevys and Toyotas.
My sister, her husband and their two daughters moved to NOLA in the wake of Hurricane Katrina to take jobs in the rebuilding school system and they were able to purchase their house for under $240,000 back in 2007.
Spending that kind of money to move to a city decimated by a hurricane and rife with crime sounded crazy to me at the time and for a few years after they moved there.  However, after having stayed with them a few times and witnessing their upper middle class lifestyle first hand, I know praise them as geniuses for purchasing their home when prices bottomed out.
Image result for uptown new orleans homes for sale
An Uptown NOLA home comparable to my sister’s.
Last time I stayed with my sister, she and her husband were talking about how their property taxes had been raised a bit.  She referred to it as the millage rate being raised, a term that I was not familiar with, so I asked and she told me that is another term used for property tax rate.  Being the nosy parker that I am, I asked how much their taxes are.
“Almost three thousand dollars,” my sister told me.
“What!” I exclaimed.
She asked me if that was high, having been a renter up until the time that she purchased that home, and never having had to pay property taxes in Illinois, let alone in the Chicago area.  I never told her what ours are before, either, and apparently neither had our brother.
“That’s very low,” I told her.  “Mine are nearly twice that, and our home is only assessed around two hundred grand.”
She proceeded to tell me that her home was reassessed at around $450,000, but that most comparable houses in her neighborhood were selling for over $500,000 and up.
Again, even though I do not consider a “Zestimate” to be as accurate as an appraisal, my sister’s home’s is estimated to be worth nearly $600,000 by Zillow.
OFF MARKET Zestimate®:$559,291
Rent Zestimate®: $2,635 /mo
Being a teacher and her husband also employed in the field of education as a consultant, she was more upset by how low her property taxes are, explaining that that is why the public schools in New Orleans “suck” compared to the public schools that we send our children to in the northwest burbs.
I told her to count her blessings, since her children have both been admitted to the top public school in the City and that if she owned a home with a $500,000 value by us, she would be paying nearly a thousand per month in property taxes.
My wife’s father purchased a beautiful home in a resort area in Arizona after having toiled and worked in New Jersey, California, Michigan and Wisconsin for many decades.
He now lives with his wife in a beautiful Arizona-style home with an open concept and an outdoor pool with a lovely veranda.
Image result for lake havasu city houses
My father-in-law’s home in Lake Havasu looks like this, but a little nicer.
Although it is just him, his wife and their chihuahua, their house is around 2,200 square feet with modern fixtures and good-sized rooms.
Since I often talk about finances and was pontificating on my own desire to retire out of State someday when we visited them there, I asked what his property taxes are.
Comparable to my sister’s, he pays about half of what we do, or a Grant every week if you will.  Like New Orleans, the school system in Lake Havasu City and most parts of Arizona suck.  Sorry, Arizona and Louisiana readers, but you know it’s true.
Where he lives is a mixture of mostly retirees from cold weather places in the Midwest and blue collar and working class locals whose livings are tied to the tourism business.  It is miles away from any real industry and there are no lawns to maintain in the area.  Thus, requests for increases in school funding are not embraced and the requests typically fall short of adoption.
Kentucky, Missouri, Indiana, Wisconsin, Ohio and Tennessee
Looking at houses outside of Illinois, I am often shocked at how low the property tax bills are.
True, comparable jobs in those states typically pay less than in Illinois, a die-hard Union-heavy blue state, and many of those jobs likely do not even exist in most parts of those states.
But that does not keep me from looking around at “retirement” homes or even homes that could be a second home for us.  No, I am not in the second home market, but it does not hurt to dream.
On a whim, I searched for homes in Lexington, Kentucky as an example.  Friends of ours’ son goes to the University of Kentucky and his father speaks highly of Lexington and often tells me that I would love the area.
Today, August 6th, 2017, a beautiful 2,222 square foot four bedroom home with two and a half baths at 1030 Elmdorf Drive for $162,000.  The taxes on it have been $1,946 for the past three years, less than half of ours.
1030 Elmdorf Drive in Lexington, KY
Looking for homes in other nearby states like Wisconsin, Indiana, Tennessee, Missouri and Ohio, I find that they all have tax rates lower than Illinois’, and some by quite a large amount.
The Balance.com recently rated Illinois property taxes the second highest of the fifty states based on home value, coming in slightly ahead of New Jersey once again.  Interestingly, Wisconsin was not very far behind.

The Worst States for Property Taxes

The Tax Foundation found that homeowners in these states paid the most in property taxes:

  1. New Jersey – 2.38 percent
  2. Illinois – 2.32 percent
  3. New Hampshire – 2.15 percent
  4. Connecticut – 1.98 percent
  5. Wisconsin – 1.96 percent
  6. Texas – 1.90 percent
  7. Nebraska – 1.84 percent
  8. Michigan – 1.78 percent
  9. Vermont – 1.71 percent
  10. Rhode Island – 1.67 percent

This chart is pretty spot on in our case.  If you value our home at about $225,000 and then multiply it by the above 2.32 percent, you get a property tax of nearly exactly $5,200.  I suppose that if we lived in Jersey, it would be $5,300.

Whether you consider paying $5,200 per year in property taxes to be a lot or a little depends on many things, some of which include where you live, how high or low of an income you have, whether you value strong public schools or not, whether you live in a urban, suburban or rural area, and more.

When I think about it, that amount it is about just right for us.  Of course, I would rather pay less, but I understand that we live in a highly taxed area with strong schools.  Heck, most of the public school teachers and administrators in our children’s school district make six figure salaries.

Plus, Illinois has the most units of local government in any State of the fifty, so if you grow up around here, high taxes are just a part of life, like a lot of political corruption and high crime in Chi-Raq.  They are nearly immutable Laws of Nature.

When your property tax bill includes districts like the mosquito abatement district, Township, library, park district, forest preserves, public health department, community college district and more, it is no wonder that the bill comes out so high.

While perusing some of the Ninja, Samurai and Zen blogs last week, I came across a post by Mike on Ninja Budgeter that describes how he found an extra $718 by discovering some extra funds in his mortgage escrow account in which he had been paying his property taxes.

Not being a fan of escrow accounts, myself, my wife and I waived escrow when we purchased our home ten days before 9/11. so I stroke checks to the County Treasurer twice per year when property taxes come due.

Mike the Ninja Budgeter writes that three years ago when they first bought their home, their mortgage provider offered them an option regarding their property taxes. Normally they would pay the property tax ourselves with saved money, like we do, and he thinks theirs amounts to around $1,500 per year in Canadian money, which equates to about a mere $1,200 per year in U.S. currency.

1,500.00 Canadian Dollars
CAD = 0.7883 USD
1,182.45 US Dollars
USD = 1.2686 CAD

I have not commented on his or anyone else’s blog post, but if I did, I would tell Mike the Ninja Budgeter to count his blessings.

After all, he only has to pay a Benjamin per month for property taxes, not a Benjamin per week like I do, two Benjamins per week like my brother, best friend and co-worker do, or three Benjamins per week like my aunt and uncle do.

 

 

 

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