With the state budget impasse holding up Cook County property tax bills, the Village of Brookfield and Riverside-Brookfield High School District 208 find themselves in the position of having to borrow money to pay the bills, while other taxing bodies are having to dip into their cash reserves while waiting for tax receipts to roll in.
On Sept. 24, the Village of Brookfield's Board of Trustees mulled a request from Village Manager Riccardo Ginex to authorize issuing up to $2.7 million in tax anticipation warrants if tax bills are not sent out to Cook County residents before mid-October. The board is expected to vote on a resolution authorizing the short-term debt at its Oct. 8 meeting.
Tax anticipation warrants are short-term loans to taxing bodies. When property taxes are received by the municipality, the warrants are paid off with interest.
"The state is really putting us in a cash-shortage situation," said Ginex at the Sept. 24 Committee of the Whole meeting. "As of today, we still don't know when tax bills are going out. Tax revenue could be coming in three months late."
Second installment property taxes in Cook County are typically due to be paid Aug. 1. However, tax bills are being delayed this year over the tax relief legislation battle between Gov. Rod Blagojevich and Illinois House Speaker Michael Madigan. Blagojevich wants to permanently extend the 7-percent residential property assessment cap, while Madigan supported a compromise that passed the Illinois legislature but was vetoed by Blagojevich.
The Illinois House met yesterday after press time to consider a veto override. An override would also need to be sanctioned by the Illinois Senate.
Since the Cook County assessor doesn't know exactly how to calculate the homeowner's exemption until the impasse is resolved, tax bills will be delayed.
As of late last month, Brookfield's cash reserves were down to $1.3 million. With a $1.2 million debt payment set to hit the books on Dec. 1, Brookfield needs the tax anticipation warrants just in case.
"If they delay sending out tax bills until Nov. 1, that could really put us in a bind," Ginex said.
Neither the village of Riverside nor North Riverside anticipate issuing tax anticipation warrants. In the case of Riverside, the village's general fund reserve of over $5 million can absorb the impact of the late tax payments for a number of months.
"That's why we have it," said Village Manager Kathleen Rush.
North Riverside, on the other hand, doesn't rely on its property tax collections to pay the vast majority of its bills. As long as sales taxes-which comprise roughly 80 percent of the village's revenue-keep rolling in , the village won't have to worry about late property taxes.
"Property taxes for us is so minimal, about $490,000, that as of right now I don't foresee it as something that'll be a huge factor for us," said Village Administrator Guy Belmonte.
RB moves ahead on warrants
Meanwhile, the Riverside-Brookfield High School District 208 Board of Education on Monday passed a resolution to issue $6.7 million in tax anticipation warrants, an amount that should easily cover the district's expenses through the month of December, according to Business Manager Christopher Whelton.
According to Whelton, the district should receive the tax anticipation money by Oct. 11 and it will immediately be invested and begin earning interest. Whelton said that district will likely be charged an interest rate close to 4.9 percent. With interest earnings offsetting those costs, the warrant issuance should end up costing the district around $10,000, Whelton said.
The amount of the warrant issue was driven in part by a $2 million debt payment due on Dec. 1. That payment is for construction loans taken out this year.
The warrants will be paid off by Jan. 3, according to Whelton.
"We would not have had to do this if the tax bills had gone out on time," Whelton said. "It's unfortunate the governor and speaker can't get together on this."
