Cook Co. property tax bills asking more upfront

The most recent batch of property tax bills have Cook County homeowners and taxing bodies alike scrambling for cash.

Accompanying the bills, which are due March 2 and began arriving last week, is notice of a new state law requiring taxpayers to pay 55 percent of last year's property tax bill in the first installment instead of the usual half.

Taxpayers also learned the remainder of what they owe can't be calculated until 400,000 assessment appeals are heard, which will push back second installment due dates as late as January 2011.

As a result, homeowners are forced to pay bigger first-installment property tax bills just three months after last year's delayed second-installment bills were due, and school districts relying so heavily on property tax revenue are now wondering how they'll meet payroll.

"I think people are feeling the squeeze of the bills being so close together," County Treasurer Maria Pappas said. "People at my counter are furious today."

Pappas opposed the change, passed by the Illinois Legislature last spring and signed by Gov. Pat Quinn in August. She said she included the prominent notice in the bills to be as transparent as possible.

State Rep. Ed Sullivan, a Mundelein Republican who was an alternative chief co-sponsor when the bill was proposed, said the purpose of the 55 percent is to reduce sticker shock. Property taxes typically increase year to year, and those increases are reflected in the second installments, he said.

"This really benefits people of lesser economic means because it softens the increase you're inevitably going to pay," Sullivan said. "You don't get socked with it all at the end."

The law affects Illinois counties with more than 3 million people, meaning Cook County.

Whereas Lake County's first installments are accurate, Cook County's first installments are only estimates because the new taxes have yet to be determined.

The backlog of appeals could affect taxing bodies, especially school districts. For example, 80 percent of Palatine-Schaumburg High School District 211's overall revenue comes from property taxes.

"Districts without a decent reserve fund would, from a cash flow standpoint, potentially be unable to meet payrolls or accounts payable in the fall," Associate Superintendent for Business David Torres said, noting that District 211 policy requires its reserve fund total at least one-third of its operating expenditures.

"Districts without that reserve may be forced to do some short-term borrowing or inter-fund cash transfers."

That's exactly what Palatine Township Elementary District 15 had to do in November. The district issued $7.5 million in short-term debt known as tax anticipation warrants to pay bills in the event second installments came in later than expected.

The other problem with a backlog of assessment appeals, Torres said, is that school districts miss out on interest because bills have to be paid as soon as the revenue is collected.