With Cook County property tax bills delayed until the end of the year, the county wants to offer up to $300 million in loans to suburban taxing bodies that rely on those taxes and are now struggling to pay their bills.
Schools, fire departments, libraries and municipalities depend on the revenue collected from property taxes. But the second installment of property tax bills isn’t likely to be sent to taxpayers, including homeowners and business owners, until December, about four months later than usual.
The loans would be prioritized for taxing bodies with the greatest need.
“The impact will not be felt evenly and will disproportionately affect taxing districts in historically disinvested and low-income communities,” Cook County Board President Toni Preckwinkle said Thursday in a briefing with reporters.
The loan program is scheduled to be presented to the Cook County Board later this month for approval.
Various county agencies involved in processing property tax bills have blamed each other for the delay, pointing to gaps in trying to work between old and new technology. Preckwinkle said the delay is happening during a pandemic and the “largest technology upgrade the county has seen in over half a century.”
In April, during a special county meeting about the delay, leaders at a handful of organizations and local governments underscored what was at stake.
Small businesses could have trouble closing their books at the end of their fiscal years. The unpredictability of when property taxes are paid could signal it’s tough to do business in Cook County, hurting recruitment efforts. Homeowners could end up paying back-to-back property tax bills that typically come six months apart, which could hurt low-income residents and seniors on a fixed income the most.
In a written statement, Pleasantview Fire Chief Steve Norvilas in the western suburbs told county leaders that property taxes make up more than 90% of the fire district’s revenue.
“While we plan for purchases and carry reserve funds for emergencies, we will not be able to absorb a six month delay in property tax revenue,” Norvilas wrote. “If this were to occur we would have to make difficult decisions on how to proceed. I am concerned that this would equate to service reductions for the residents we are proud to serve.”
The loan program would only be for taxing districts in suburban Cook County — not in Chicago. Those eligible must have less than 120 days of cash on hand to pay their bills, which represents the expected four-month delay in getting property tax payments. And their bond ratings must be lower than the county’s current ratings.
The program is estimated to cost Cook County about $5 million, including interest. The loans would be repaid once the property taxes are paid.
Preckwinkle acknowledged there’s more work to do to fix the delays in getting property tax bills out on time. It could take years.
Kristen Schorsch covers public health and Cook County on WBEZ’s government and politics desk. Follow her @kschorsch.