This time Kaegi will have to run on his record—a new approach to property tax assessments that has provided some relief to homeowners while angering commercial property owners. He also must decide whether to flex some political muscle by going after members of the Cook County Board of Review, who have hindered his agenda.
Kari Steele, the president of the Metropolitan Water Reclamation District of Cook County, this week entered the primary race against Kaegi. A chemist by training, Steele is seen as a strong challenger by close political watchers. She’s a solid stump campaigner who has run successfully countywide before.
Other trends play in her favor. Democratic voters are increasingly excited at the prospect of electing women of color. She has the backing of one of the most successful Black elected officials in Illinois: outgoing Secretary of State Jesse White.
She’s also rounding up support from powerful building trade unions—including the International Union of Operating Engineers Local 150. Unions say Kaegi’s assessments discourage investment in commercial real estate projects that create jobs for their members. Their support would bring Steele money to help get her message out and campaign workers to knock on doors and gin up support.
Still, she faces an uphill fight. Incumbents in technocratic offices like the assessor’s rarely lose unless they’re involved in a controversy like the one that helped Kaegi defeat Berrios, says political science professor Christopher Mooney of the University of Illinois Chicago.
Kaegi was swept into office in 2018, fresh off a blockbuster Chicago Tribune series that focused in large part on assessments during Berrios’ tenure as Cook County assessor. According to the Tribune, assessments under Berrios unfairly benefited downtown building owners at the expense of homeowners and fueled a lucrative cottage industry for property tax attorneys. The series built on prior reporting on his practices of hiring family members and accepting donations from those attorneys. Berrios defended his assessments as accurate.
Kaegi campaigned on promises to end nepotism, ban donations from property tax lawyers, and make assessments fair and accurate by raising commercial assessments. The first two promises were easy enough to keep: Kaegi had enough personal wealth to lend his campaign $2.3 million and joked his children were too young to hire anyway. Kaegi says he’s also delivering on the third campaign promise.
“We’re getting results," he says. "People can see that homeowners’ share of the burden has been reduced in areas that we’ve reassessed. The median residential tax bill’s only been up 1% this year in Cook County, same as last year. That’s because we’re following through on closing the valuation gap on big commercial properties.”
In 2018, Kaegi could paint Berrios as a corrupt insider who oversaw a rigged process benefiting big business. Now he’s accountable for the office’s performance over the past three years and faces the complicated task of explaining to voters how his assessments affect their property tax bills.
Some voters may wonder why Kaegi’s assessment shift hasn’t significantly reduced their taxes. But the assessor doesn’t set property taxes. He merely sets the value of property for tax purposes, which determines each home or business property’s share of the tax levy established by local government agencies. A lower assessment doesn’t necessarily mean a homeowner’s bill will decline if tax levies are rising. And a 1% increase doesn’t feel like much relief in Cook County, where property taxes are among the highest in the nation.
Kaegi has been “long on promises but short on results,” Steele said in her announcement video, suggesting he’s an incompetent manager who bungled administration of the senior freeze program and has not cut bills for working families.
In an apparent appeal to commercial interests, Steele told Crain’s that she would promote “equity and fairness” but also “have an open door policy” for the business community to express their questions or concerns. “Of course, I will seek their support,” she said. Like Kaegi, she says she won’t take donations from real estate attorneys or appraisers.
The commercial real estate industry has lots of money and motivation to oust Kaegi. He’s sparred with business groups over his assessments, which have shifted more of the property tax burden to commercial properties countywide. The latest round, covering downtown properties north of the Chicago River, hiked total nonresidential assessed value by 60%.
In an emailed statement, Building Owners & Managers Association Executive Director Farzin Parang blasted Kaegi for "his completely unsupported decision last year to shift assessments onto offices and other businesses in the middle of an economic crisis," and for "baffling assessments that office buildings are worth twice what they were before the pandemic.”
Kaegi has attracted some support from other parts of the business community—recent donors include venture capitalist Bradley Tusk, Ariel Investments Chairman John Rogers and former Playboy Enterprises CEO Christie Hefner. Kaegi told Crain’s he’s also willing to open up his own checkbook again. “I’m always ready to have more skin in the game if necessary.”
Steele also told Crain’s that she’d have a better relationship with the Board of Review. The review board is a second point of appeals for property owners. It has knocked down many of Kaegi’s commercial valuations. All three members are up for re-election in 2022, too. So far only one challenger has emerged, 12th Ward Ald. George Cardenas.
Will Kaegi play politics and try to take down review board members? Not directly. “I’ve never endorsed in a Board of Review race, and I don’t plan to,” Kaegi says. But he won’t hesitate to talk about how review board changes to his assessments are affecting tax bills. “When there are cases that seem unusual, I’m going to call attention to them. I’m not personalizing it.”
It’s a prudent move for Kaegi, who doesn’t have the same operation as machine politicians of old, says Mooney. “That would be a big power move that I would expect to see done by someone like the old Mayor Daley. It would take a lot of effort. I don’t know that he’s up for it."
Such a maneuver might make Kaegi look like a machine politician, too—a label he has already attached to Steele. In a fundraising email sent the same day as Steele’s announcement, Kaegi’s campaign called her candidacy a sign that “the machine wants its power back.”
via Crain’s Chicago Business
September 27, 2021 at 04:08PM