County Treasurers Discuss Property Tax Interest Delay For IL

This story was updated at 4:55, April 7, to include new information from IL House Speaker Michael Madigan's office.

ILLINOIS — As the coronavirus crisis continues to take a toll on businesses, workers and public agencies, one topic on everyone's minds - among many others - is taxes. How will people pay them? Will there be extensions? Adjustments?

While not addressing every tax question, several county treasurers in Illinois told Patch they are currently discussing a proposal to delay interest and penalties on property taxes within the state this year. Property taxes come due in June and September every year, but the proposal, if passed as a bill by the state legislature, would allow taxpayers to forego interest and late penalties on their June payments.

"I am in communication with several other county treasurers," Will County Treasurer Tim Brophy said. "A draft bill that was shown to me by a couple [of them] that put it together... would delay the interests and penalties on the June installment, as long as they paid everything by the September installment."

Brophy estimated that the delayed interests and penalties could collectively equal about half a million dollars in Will County alone, nevermind the rest of Illinois. A boon for taxpayers, perhaps, but Brophy expressed concern over what that amount of lost revenue could mean for local public services and school districts.

"Every year, some people don't pay on time. So if we go back to last year and look at who didn't pay on time and what did the county earn in interest and penalties in 2019... it was a little over half a million dollars," Brophy said. "So that's what we're being asked to forego, so I'd have to look to the county board and say, 'where are you going to get that half a million dollars in the budget that you were expecting?'"

Conversely, Kane County Treasurer David Rickert said he thought such a delay was something Illinois taxpayers might need as they feel the coronavirus-induced economic squeeze.

"For people that are struggling to make payment on that [tax] due date, they could use some economic relief," Rickert said. "This allows them to pay at a later time without penalty."

Rickert acknowledged that he had similar concerns to Brophy regarding how the lost tax penalty revenue could affect public services. He estimated loss of revenue to Kane County at over $340,000. However, he said he believed that if nothing was done, the area's small business community could be severely damaged.

"We... believe it will have an effect on the counties' bottom line," Rickert said, "because interests and penalties currently go the counties... The concern we have on the reverse side is the impact on the small business community... We're also concerned about the sales tax revenue we may lose if these businesses are forced out business because of property tax and other issues."

At the moment, these discussions over the pros and cons of a tax interest rate and late penalty delay are just that: discussions. Any action authorizing a delay of those rates and penalties would have to be passed by the state legislature, and it is not known when the legislature will next convene.

The legislature is currently scheduled to meet April 21, but a representative with House Speaker Micheal Madigan's office said it was likely that date would be postponed.

"Without them convening, the proposal doesn't really matter," Brophy said. "We're in limbo."

Brophy and Rickert both said that some legislators have expressed interest in the bill, including Senators Linda Holmes (D-Naperville) and Donald DeWitte (R-St. Charles). Patch reached out to both representatives' offices multiple times for comment, but has not yet received a response.

Provided the legislature does consider the proposal in a few weeks time, Brophy explained, there would still be a good deal of wiggle room state lawmakers could choose to apply in passing it.

"It can start with the state, and you can make it either mandatory or optional," Brophy said. "So the state could say, 'you must delay your tax bills by three months,' and then we'd have to. Or they could say, 'this is a bill that's a resolution, we suggest that you forego interests and penalties until your second [tax] installment... don't penalize people on missing the first one.'"

How the bill gets passed, if it even does, will come down to what the state legislature chooses to prioritize: individuals and small businesses, or public services like school and fire districts. Either way, the coronavirus crisis will likely continue to affect the economy in unpredictable ways. This proposal is only one way state, county and municipal officials are still trying to make sense of it.

"We've really venturing off into uncharted territory here," Rickerts said.