Overdue property tax bills prompt to offer Cook County loan

Fearing late property tax collections will slam library, town and school budgets, Cook County Council Chairman Toni Preckwinkle has offered local tax agencies up to $300 million in total in interest-free loans in July to help them get through the final months of 2022.

However, of the roughly 500 suburban local government agencies county officials deemed eligible, only 49 applied, with a total request of $104 million, according to county data received through an open records request.

Twenty-one cities, towns and villages have requested relief. The same was true for 13 park districts, seven fire districts, five library districts and three school districts.

The biggest claim, from the village of Dolton, was for $11 million. The smallest, from the Robbins Park District, was $100,085. City of Chicago tax jurisdictions were not eligible.

Preckwinkle announced the loan program as a way to help tax districts bridge a months-long backlog in receiving property tax revenue. Invoices that are usually due August 1 have still not been sent, thanks to a spat between the office of Cook County Assessor Fritz Kaegi and the County Board of Review, which hears appeals to assessments property tax.

While Preckwinkle pledged to have invoices sent out before the end of the year so individuals can still “take full advantage of the federal, state and local tax deduction” on their 2022 federal income taxes, districts that depend on these revenues for operations have been presented with a cash flow problem. The county said it was willing to lend tax districts up to $500 million in total, interest-free, to help.

To be eligible, districts had to have less than 120 days of cash and a lower bond rating than Cook County (A2 from Moody’s, A+ from S&P and AA- from Fitch).

Not all of the 49 applicants who applied met the program’s eligibility criteria, a county spokesperson said, and some applications are still being reviewed. So far, six applicants have received funding.

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Ted Nelson, spokesman for the County Office of Finance, attributed the low turnout to rising revenue, in part.

“Based on our outreach efforts, the combination of available federal relief funds, larger-than-expected distributions (personal property replacement tax), and increases in sales tax revenue caused by inflation, have all contributed to a better than expected cash flow,” he said in an email. “Additionally, many local tax jurisdictions are quite comfortable doing their own borrowing.”

Despite the low turnout, Nelson said the county considers the program worthwhile. “These local tax districts will be able to continue to provide vital services to residents without fear of not having enough cash on hand to pay for them. This breathing space is so important to local governments, and we are happy to (be able to) provide this financial assistance. »

The vast majority of candidates are in the western, southwestern and southern suburbs. Some regions had multiple tax agencies requesting loans. In the city of Calumet, for example, the Calumet Memorial Park District, its library, School District 157, and the city government itself have requested a total of $13.8 million in loans. In several areas, the village and its park district both applied: to Dolton for a total of $12.2 million, to Bridgeview for a total of $5.6 million, and to Berwyn for a total of 10, $7 million.

Kristi DeLaurentiis, executive director of the South Suburban Mayors and Managers Association, said she has yet to hear back from the tax districts her organization represents, but told the Tribune she was “a little surprised that ‘there are not as many requests as expected. ”

She praised the county for launching the program and encouraged mayors and managers to apply, but doesn’t think the low turnout is because local communities don’t need help. It’s “not because the communities are cash-rich, especially not in the southern suburbs” where dormitory communities generate less sales tax revenue and many cities and towns collect only a portion of that due to them in property taxes.

Many communities have kept their belts tight during COVID-19, and “because so many communities have taken such a conservative approach, they may have enough funds to carry them out” and failed to qualify, he said. she adds.

The county had estimated the loan program would cost $5 million out of pocket. With fewer applicants, however, “we anticipate the loan will cost the county less than the $5 million originally announced,” Nelson said. “The final cost to the county will be relatively low, but the benefits to places like Dolton or Robbins will be enormous.”

The City of Berwyn and the North Berwyn Park District have also requested loans: Berwyn for $10.4 million and the Park District for $300,000. The town of Blue Island asked for $2 million and its library fund asked for $400,000. Hazelcrest ($6 million), Park Forest ($4 million), Oak Lawn ($3 million) and Lansing ($2.8 million) also applied.

The maximum loan is intended to cover four months of income shortfall. Those with the least cash on hand – 60 days or less – would get the full loan amount. Those with 61-90 days of cash would get 75% of the maximum loan amount, and those with 91-120 days of cash would get 50%.

The county partnered with a private lender, PNC Bank, to lend money to suburban agencies so they wouldn’t have to go into short-term interest-bearing debt.

To repay the loan, each local taxing jurisdiction would be required to direct the Cook County Treasurer to intercept the first dollars the jurisdiction is supposed to receive in property tax revenue from the second installment and remit them to Cook County.