For the past four years, Jack Schaller didn’t have to pay a dime in property taxes on the two-story building where he lived until his death in May above Schaller’s Pump, the Bridgeport bar his family founded in 1881.
Fred Pegelow, 67, doesn’t have to pay any property taxes this year on his six-flat in North Center — a far cry from last year, when he paid $12,448 in real estate taxes.
Katherine Kent, 80, hasn’t had to pay property taxes either on her condo along Lake Shore Drive for at least five years, and she’s grateful because “I don’t have that kind of money any more.”
They are among 4,188 senior citizens across Chicago who didn’t have to pay property taxes on their homes this year, a Chicago Sun-Times analysis of more than 880,000 tax bills and property assessments in the city has found.
The tax breaks those seniors got meant higher taxes for everyone else, shifting $9.6 million in property taxes to other homeowners and businesses, most of whom have been socked with soaring tax bills this year caused by a combination of new, higher property values set by Cook County Assessor Joseph Berrios and Mayor Rahm Emanuel’s tax hike to fund pensions for police and firefighters.
Another 1,692 seniors living in the Cook County suburbs also received tax bills showing they owed no taxes on their homes this year, the Sun-Times found. It’s difficult to determine how much those breaks cost others in those suburbs since tax rates vary by community and school district.
All of these seniors are benefitting from a program called the senior citizen assessment freeze, which the state of Illinois created two decades ago as a lifeline for older people who feared they’d be forced out of their homes when their neighborhoods became hot and real estate taxes skyrocketed. Under the program, the longer seniors stay in their homes, the more they can save on their property taxes, often ending up paying nothing at all.
This year, some seniors, like Pegelow, also benefited from a new program the Illinois Legislature and Gov. Bruce Rauner approved last year that eliminates all property taxes on the primary residences of any veteran who’s at least 70 percent disabled, as certified by the U.S. Department of Veterans Affairs.
The new law eliminated property taxes this year for 2,470 disabled vets in Cook County, including 857 homeowners in Chicago, among them two doctors living on Lake Shore Drive and a popular radio broadcaster whose husband is a disabled veteran. By exempting these veterans, another $3.1 million in taxes got shifted to other property owners.
“Property taxes are so astronomical in the state of Illinois,” says state Rep. Deb Conroy, D-Villa Park, who sponsored the legislation exempting disabled vets. “People are being priced out of their homes . . . because the taxes are too high.”
Asked about others having to make up for those veterans exempted from taxes, even some with high-paying jobs, Conroy says: “I may have to pay a few more dollars on my property taxes because somebody defended the country for me. I’m OK with that.”
These tax breaks further complicate the state’s property tax system by providing deals for some homeowners and businesses at the expense of everyone else, says Carol Portman, president of the Taxpayers Federation of Illinois, a Springfield advocacy group.
“It’s one of the problems of these exemptions that legislators push through to help a particular group of people like seniors or veterans,” Portman says. “They don’t cut taxes. They just shift the burden onto others.”
This latest tax break for disabled veterans has no restrictions on age or income, unlike the senior assessment freeze, available only to people 65 or older whose yearly income is $55,000 or less.
The seniors and veterans alike have to apply for the tax breaks every year, attesting that they live in and own the building — whether it’s a single-family home, a small apartment building or a storefront with apartments upstairs, like Schaller’s Pump and dozens of other buildings across Cook County that have gotten the exemptions.
Schaller’s Pump has been operated by Jack Schaller’s family for five generations. Schaller, who died three months ago at the age of 92, owned three properties: the two-story building that houses the bar and his apartment and two adjacent parking lots, across the street from the headquarters of the 11th Ward Democratic Party, the Daley family’s political power base.
Five years ago, Schaller got a bill for $56.46 from Cook County officials to cover the taxes for his apartment and bar. It was the last time Schaller had to pay any property taxes at all on the 5,336-square-foot building, though he still had to pay them on the parking lots. The taxes on the parking lots this year totaled $6,063.
Over the past four years, Schaller saved thousands of dollars in taxes by qualifying for three exemptions provided under state law — the homeowner exemption, which knocks $7,000 off a property’s assessed value; the senior exemption, worth as much as $5,000; and the senior assessment freeze, which provides the owner with a cut based on the difference between the home’s assessment when it was frozen and the current assessment.
Without those, Schaller would have owed $6,128.66 in taxes this year on his bar and apartment. Instead, the bill Cook County Treasurer Maria Pappas sent him showed he owed nothing.
Now that Schaller has died, his family expects Berrios will terminate the two senior exemptions — which means the bar will resume paying taxes next year for the first time since 2012.
“I was told we’ll be hammered,” says Schaller’s daughter, Kimberly Shinnick, the executor of her father’s estate who now runs the family bar.
The Sun-Times analysis found that the senior assessment freeze has eliminated property taxes for many homeowners, while others got nominal tax bills this year:
• 18 seniors in Cook County ended up with tax bills of $1 or less.
• One Chicagoan owed just seven cents.
• 1,886 seniors got tax bills of between $1 and $100 this year, most of them in suburban Cook County.
While tax bills have been eliminated for thousands of seniors across the city and most suburbs, no one living in some of Cook County’s wealthiest suburbs, including Kenilworth, Winnetka and Wilmette, got these tax breaks.
Like many senior citizens, Pegelow, 67, has benefited from multiple tax breaks the past few years on his six-flat at Cuyler Avenue and Wolcott Avenue, records show. His property tax bill totaled $12,447.61 last year. And he was facing a bill of $16,394.48 this year because Berrios found that the value of his building in the booming North Center neighborhood on the city’s North Side has risen.
But Pegelow reduced his tax bill this year to zero by using four tax breaks, including the disabled veterans exemption available to those with a 70 percent disability. It was one of the steepest drops among all of those in Chicago getting the senior citizen assessment freeze or the tax break for disabled vets.
Pegelow and his tax attorney, Christopher G. Walsh Jr., declined to talk about his tax bill.
An attorney for Berrios, whose office administers these tax breaks, says the agency is barred by law from releasing the applications filed by seniors because they contain financial information and can’t make public applications from veterans because they contain the letter certifying they are disabled.
Daniel Hefner, president of an insurance agency, and his wife Mary paid $21,911.35 in property taxes last year on their 3,600-square-foot home on an 11,850-square-foot lot in Oak Park. This year, they were facing a tax bill of $25,167.80. But they ended up having to pay nothing because Hefner got the new disabled veterans tax break. Hefner declined to comment, other than to say of his disability, “It’s over 70 percent” so he’ll never have to pay property taxes on his home.
WBBM radio newscaster Felicia Middlebrooks and her husband, Anthony Hill, paid $3,806.28 in property taxes last year on their condo on North Lake Shore Drive in Streeterville. This year, they didn’t have to pay anything because her husband qualified for the new disabled veteran’s exemption. Middlebrooks declined to comment.
Dr. Roger Perry, 72, a retired Mercy Hospital radiologist, and his wife Bonnie paid $7,915.25 in property taxes last year on their condo in a 16-story vintage building along North Lake Shore Drive in Belmont Harbor. This year, they didn’t have to pay anything because of the exemption for vets with a disability of at least 70 percent. He says that’s the result of a heart ailment dating from his Army service during the Vietnam War, when he was stationed at bases in Texas and elsewhere in the southern United States.
“It’s worked very well,” Perry says. “I got a zero tax bill. It was a pleasant surprise.”
Contributing: Data Reporting Lab editor Darnell Little
Among Cook County residents who didn’t have to pay property taxes thanks to exemptions:
Jack Schaller, 92, owner of a two-story building that includes Schaller’s Pump, one of the city’s oldest bars.
3700 block of S. Halsted St., Bridgeport
County’s estimated value of property: $334,450
Estimated tax bill: $6,128.66
Actual tax bill: $0 after Schaller, who died earlier this year, received three exemptions — homeowner, senior citizen and senior assessment freeze — wiping out his tax bill for the fourth straight year
Fred Pegelow, 67, owner of a six-flat
4000 block of N. Wolcott Ave., North Center
County’s estimated value of property: $894,670
Estimated tax bill: $16,394.48
Actual tax bill: $0 after Pegelow received four exemptions — homeowner, senior citizen, senior assessment freeze, disabled veterans — wiping out his tax bill, which totaled $12,447.61 last year
Elizabeth Martinez, 87, owner of a small brick home
1700 block of W. LeMoyne St., Wicker Park
County’s estimated value of property: $585,430
Estimated tax bill: $10,727.76
Actual tax bill: $0 after Martinez received three exemptions — homeowner, senior citizen and senior assessment freeze — wiping out her tax bill for the fourth straight year. A developer bought the home for $455,000 last September, demolished it, and put up a new home.
Paul Bastida, 61, who has a financial stake in a two-story home owned by his mother Esther
1700 block of N. Wood St., Bucktown
County’s estimated value of property: $525,860
Estimated tax bill: $9,636.19
Actual tax bill: $0 after Bastida’s mother received three exemptions — homeowner, senior citizens and senior assessment freeze — wiping out her tax bill for at least the fifth straight year.
She and her son co-signed two loans on the home, which she signed over to her son last year.
Katherine Kent, 80, owner of a condo
2900 block of N. Lake Shore Drive, Lake View
County’s estimated value of property: $229,120
Estimated tax bill: $4,198.55
Actual tax bill: $0 after Kent received three exemptions — homeowner, senior citizen and senior freeze — wiping out her tax bill for at least the fifth straight year
Joanne Bartelt, 86, owner of a condo
700 block of N. Michigan Ave., Near North Side
County’s estimated value of property: $122,580
Estimated tax bill: $2,246.20
Actual tax bill: $0 after Bartelt received three exemptions — homeowner, senior citizen and senior assessment freeze — wiping out her tax bill for the fourth straight year
Joseph Kasper, 91, owner of a building including Delta Lounge and apartments
5600 block of 87th St., Burbank
County’s estimated value of property: $317,260
Estimated tax bill: $10,762.11
Actual tax bill: $0 after Kasper received three exemptions — homeowner, senior citizen and senior assessment freeze — wiping out his tax bill for at least the fifth straight year
John Gill, 68, owner of a two-story home
7300 block of Holly Court, River Forest
County’s estimated value of property: $461,310
Estimated tax bill: $14,578.85
Actual tax bill: $0 after Gill received four exemptions — homeowner, senior citizen, senior assessment freeze and disabled veterans — wiping out his tax bill, which totaled $10,785.05 last year
Eileen Bartels, 90, owner of a two-story home on eight acres
5500 block of W. Steger Rd., Monee
County’s estimated value: $263,770
Estimated tax bill: $11,077.63
Actual tax bill: $0 after Bartels received three exemptions — homeowner, senior citizen and senior assessment freeze — wiping out her tax bill for the fourth straight year
Paul and Linda Calabrese, owners of storefront with apartment
8900 block of W. Grand Ave., River Grove
County’s estimated value: $151,780
Estimated tax bill: $5,119.86
Actual tax bill: $0 after the Calabreses received four exemptions — homeowner, senior citizen, senior assessment freeze and disabled veterans — wiping out their tax bill, which had been $3,175.43.
TOP NO-TAX NEIGHBORHOODS, SUBURBS
Across Chicago and suburban Cook County, 8,350 senior citizens and disabled veterans, including doctors and business people, don’t have to property taxes on their residences because of two state programs — the senior citizen assessment freeze and the disabled veterans homestead exemption for those with a 70 percent disability. Here are the top dozen Chicago community areas and 12 suburbs with the most residents whose tax bills have been wiped out by these two programs. To view the complete list, click here.
Chicago community area No. of homeowners
West Englewood 445
North Lawndale 218
Auburn Gresham 205
West Pullman 178
West Garfield Park 174
Greater Grand Crossing 154
Washington Heights 143
New City 137
Humboldt Park 133
Cook County suburb No. of homeowners
Chicago Heights 170
Calumet City 125
Orland Park 92
Country Club Hills 82
South Holland 77
Oak Lawn 67
SOURCE: Sun-Times analysis of Cook County property assessments, tax bills