Late property tax bills prompt loan offer from Cook County

Fearing that late property tax collections would slam the budgets of libraries, villages and faculties, Cook County Board President Toni Preckwinkle provided native taxing our bodies as much as $300 million complete in interest-free loans in July to get them by way of the ultimate months of 2022.

Of the roughly 500 native governmental our bodies throughout the suburbs that county officers estimated have been eligible, nevertheless, solely 49 utilized, with a complete ask of $104 million, in accordance with county information acquired by way of an open data request.

Twenty-one cities, cities and villages utilized for reduction. So did 13 park districts, seven fireplace districts, 5 library districts, and three faculty districts.

The largest ask, from the village of Dolton, was for $11 million. The smallest, from the Robbins Park District, was for $100,085. Taxing jurisdictions within the metropolis of Chicago weren’t eligible.

Preckwinkle introduced the loan program as a means to assist taxing districts bridge a months-long delay in receiving property tax revenues. Bills which are sometimes due by August 1 have nonetheless not been despatched out, because of a spat between Cook County Assessor Fritz Kaegi’s office and the county’s Board of Review, which hears appeals to property tax assessments.

While Preckwinkle has pledged bills will exit earlier than the tip of the year in order that people would nonetheless be capable of “take full advantage of the federal, state and local tax deduction” on their 2022 federal earnings taxes, districts that rely on that income for operations have been introduced with a money movement downside. The county mentioned it was keen to lend as a lot as $500 million in complete to taxing districts, interest-free, to assist.

To qualify, districts needed to have lower than 120 days money available and a bond ranking that’s decrease than Cook County’s (A2 from Moody’s, A+ from S&P, and AA- from Fitch).

Not the entire 49 who utilized met the eligibility standards of this system, a county spokesman mentioned, and a few purposes are nonetheless below evaluate. So far, six candidates have been despatched funds.

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Ted Nelson, a spokesman for the county’s Bureau of Finance, chalked up the low participation to boosted revenues, partially.

“Based on our outreach efforts, the combination of federal relief money out there, bigger than expected (personal property replacement tax) distributions and sales tax revenue increases caused by inflation, all contributed to better than expected cash on hand,” he mentioned in an e mail. “Furthermore, many local taxing jurisdictions are quite comfortable with doing their own borrowing.”

Despite the low participation, Nelson mentioned the county considers this system nicely price it. “These local taxing districts will be able to continue providing vital services to residents without fear of not having enough cash on hand to pay for it. This breathing room is so important to local governments, and we are glad to (be) able to provide this financial assistance.”

The overwhelming majority of candidates are within the west, southwest and south suburbs. Some areas had a number of taxing our bodies request loans: In Calumet City, for instance, Calumet Memorial Park District, its library, School District 157 and town authorities itself utilized for a complete of $13.8 million in loans. In a number of areas, the village and its park district each utilized: in Dolton for a mixed $12.2 million, in Bridgeview for a mixed $5.6 million, and in Berwyn for a mixed $10.7 million.

Kristi DeLaurentiis, the manager director of the South Suburban Mayors and Managers Association, mentioned she’d but to listen to again from taxing districts her group represents, however advised the Tribune she was “a little bit surprised that there were not as many applications as anticipated.”

She recommended the county for launching this system and had inspired mayors and managers to use, however doesn’t consider low uptake was as a result of native communities don’t want the assistance. It’s “not because communities are cash rich, especially not in South suburbs” the place bed room communities generate much less gross sales tax revenues and the place many cities and villages solely accumulate a portion of what they’re owed in property taxes.

Many communities have stored belts tightened throughout COVID-19, and “because so many communities have taken such a conservative approach, they may have sufficient funds to see them through” and didn’t qualify, she added.

The county had estimated the loan program would value $5 million out of pocket. With fewer candidates although, “we anticipate that the borrowing will cost the County less than the $5 million initially reported,” Nelson mentioned. “The ultimate cost to the County will be relatively small but the benefit to places like Dolton or Robbins will be huge.”

The metropolis of Berwyn and the North Berwyn Park District additionally utilized for loans: Berwyn for $10.4 million and the park district for $300,000. The metropolis of Blue Island utilized for $2 million and its Library Fund utilized for $400,000. Hazelcrest ($6 million), Park Forest ($4 million), Oak Lawn ($3 million) and Lansing ($2.8 million) additionally utilized.

The most loan is meant to cover 4 months of income hole. Those with the least money available — 60 days or fewer — would get the complete loan quantity. Those with someplace between 61 and 90 days money available would get 75% of the utmost loan quantity, and people with 91-120 days money available would get 50%.

The county partnered with a personal lender, PNC Bank, to loan the suburban businesses money in order that they don’t must tackle short-term debt with curiosity.

To pay the loan again, every native taxing jurisdiction could be required to direct the Cook County Treasurer to intercept the primary {dollars} the jurisdiction is ready to obtain from second installment property tax revenues and switch it over to Cook County.

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