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 Mike Madigan is best known as the
longest-serving state House speaker in American history. He’s been Illinois’
House speaker for all but two years since 1983. But Madigan doesn’t make most of
his money in the speaker’s chair. He makes it through his business – lowering
property tax bills on some of Cook County’s most valuable buildings.
A joint investigation released Dec. 7 by the Chicago Tribune and ProPublica
Illinois reveals the extent to which Madigan & Getzendanner, a law firm Madigan
founded in 1972, dominates the property tax appeals business.
That domination comes within a Cook County property tax system found to
disproportionately harm lower-income residents, due in part to the appeals
process.
The game
 From 2011 to 2016, Madigan’s firm appealed property taxes for more than 4,200
parcels totaling more than $8.6 billion in assessed value. No other firm handled
more value in commercial and industrial properties over that time.
On those parcels, Madigan & Getzendanner won $1.7 billion in assessed value
reductions from the Cook County assessor, a 20 percent reduction overall.
Madigan spokesman Steve Brown disputed the appeals analysis, saying Madigan’s
firm won a mere $1 billion in assessed value reductions, but did not provide any
supporting data, according to the Tribune. No. 4 on the list is Klafter & Burke,
the property tax appeals law firm founded by Chicago Alderman Ed Burke. Burke
has served as a Chicago alderman since 1969, and is the longtime chair of the
city’s finance committee.
The man in charge of the property valuations so crucial to the businesses of
Madigan and Burke is Joseph Berrios, the Cook County assessor (a position he
attained in 2010 with the help of Madigan’s political workers). Berrios also
serves as the Cook County Democratic Party chairman. Meanwhile, Madigan is the
state party chairman. He is the only legislative leader in the nation to serve
in such a position, according to the Illinois Campaign for Political Reform.
Flatlining
Over the course of its four-part investigation, the Tribune has presented data
that suggest gross mismanagement on the part of Berrios’ office. In June,
reporters detailed the fundamentally flawed assessment system, wherein high
value properties were systematically undervalued – thus paying less in property
taxes – and lower-value properties were systematically overvalued – thus paying
more.
The most recent installment details the phenomenon of stagnant valuations of
property, which benefit the likes of Madigan’s firm.
 The assessor’s office is charged with reassessing property values once every
three years in Cook County. The purpose of reassessment is to help ensure the
property’s assessed value stays in line with its market value. In a booming
market, assessed values are supposed to rise, and thus the owner pays more in
property taxes. In a downturn, the opposite should happen.
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But the Tribune analysis
found those crucial adjustments weren’t happening for thousands of
commercial and industrial properties across the city. The assessor’s
office simply assigned identical assessed values to a given property
over multiple years.
Reporters analyzed more
than 40,000 unique parcels of property classified as commercial or
industrial, which were assessed in 2009, 2012 and 2015. They found
more than two-thirds were given identical first-pass values by the
assessor’s office in consecutive assessment years. Under James
Houlihan, the previous Cook County assessor, only 1.1 percent of
commercial or industrial parcels had identical first pass values in
consecutive assessment years.
“If your models are working correctly, the chances of values staying
exactly the same are virtually impossible,” assessment expert Peter
Davis told the Tribune.
A vast majority of owners who saw identical initial values appealed
their assessments, according to the analysis, 74 percent of whom won
reductions from the assessor, only to see the value jump back up to
the same level in the next reassessment year.
“The repetitive process feeds a property tax appeal industry that
provides the bulk of Berrios’ campaign contributions,” the report
reads.
“Inaccurate assessments also help drive business to political allies
who are property tax attorneys, including Illinois House Speaker
Michael Madigan, the longest-serving state house speaker in U.S.
history, and Ald. Edward Burke, the longtime chair of the Chicago
City Council’s finance committee.”
Madigan’s millions
Every dollar Madigan earns back for his corporate clients makes
someone else’s property tax bill go up. It falls on the shoulders of
Cook County residents not savvy enough to hire a politically
connected law firm to appeal their property taxes, or who refuse to
play the game altogether.
Madigan has never fully disclosed his sources of income, but the
House speaker gave a clue regarding his earnings in 2015, when a
reporter asked him whether he’d be subject to a proposed
millionaire’s tax.
“Do I make a million dollars in a year? … In a good year I would be
subject to this [tax],” he said.
As one of the most powerful state lawmakers in Illinois history,
Madigan should be fighting for reforms to address one of the most
pressing issues for Illinois’ middle class – the highest property
taxes in the nation.
Passing a property tax freeze on homeowners’ actual bills (not just
the levies of local governments), and requiring voter approval for
property tax hikes are two powerful reforms that would go a long way
for families struggling to pay higher property taxes as their own
incomes stagnate.
Instead, the speaker continues to cash in on an unfair system.
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