With state lawmakers ending their dispute last week over which formula to use in collecting Cook County property taxes, schools and municipalities have been forced to juggle their budgets and borrow money to cover expenses. In Forest Park, both school districts, the library, the park district and the village are all looking for ways to make payroll in the coming months as property owners are yet to even receive their tax bills.
“Since property taxes are approximately 20 percent of the village’s annual revenues and are primarily received twice a year, this delay is a significant disruption of our cash flows,” Forest Park Finance Director Judy Kovacs said in a recent report to the village council.
With a monthly payroll of about $500,000, plus other expenses, Kovacs is planning to pull money out of the Village Improvement Plan fund. There’s roughly $2 million in this account Kovacs said, which should be plenty to get the village through the middle of next month.
The dispute over the 7 percent cap on homeowner assessments appears to have been settled in time for local offices to begin taking in revenue by the end of November. Lucio Guerrero, a spokesperson for the Cook County Assessor’s office, said property tax bills will be mailed as soon as possible, but by law, taxpayers will have another 30 days to square up.
In 2004, taxpayers had until Nov. 15 to pay their bills. This was the latest due date in two decades, and is the reason Kovacs’ contingency plan hinges on that timeframe.
“(The VIP fund) is probably only two months’ worth,” Kovacs said. “We’ll have to reconsider our options if it doesn’t come in.”
State law mandates that the second installment of the annual tax bills is due no sooner than Aug. 1. Last year’s payments were due Sept. 1, the earliest in more than 10 years.
The ability to draw down one fund in anticipation of replenishing it with new revenues will likely save the village from having to pay interest on a bond or other outside loan. Proviso Township High School District 209, however, does not have that luxury.
Last month the school board voted to borrow $9.9 million in tax anticipation warrants, on which the district will pay more than $190,000 in interest. That move was necessary to cover the district’s average monthly expenses of $6 million despite also shuffling more than $7.6 million between funds.
In Forest Park’s District 91 elementary schools, where monthly expenses range between $1.2 million and $1.4 million, Business Manager Ed Brophy said the schools will be able to get by without borrowing. Reserve funds ought to be sufficient to cover six months’ worth of expenses, Brophy said.
The Forest Park Public Library, too, has enough money in the bank to avoid borrowing for six months or so. But property taxes make up “85 to 90 percent” of the library’s budget, board President Andrea Blaylock said, which means they can’t afford to watch legislators prolong the issue.
“We’re not in crisis mode, but we’re definitely watching that very closely,” Blaylock said.
At the Forest Park Park District, delays in an ongoing construction project are turning out to be a blessing in disguise, Executive Director Larry Piekarz said. Because the park budgeted for the project but hasn’t had to make payments as anticipated, those funds can be diverted as a stop-gap measure. Also, the fall season carries fewer expenses once the pool is closed and seasonal employees finish their work.
“If it was a normal year it would probably hurt us and we would have to go out for (tax anticipation warrants),” Piekarz said.
He estimated the park district has enough cash on hand to get through December.
Lawmakers in Springfield were grappling with the pending expiration of a tax cap law that was enacted in 2004. Currently, homeowners are granted an exemption of up to $20,000 in an effort to limit the year-to-year increase of their taxable assessed value at 7 percent. That exemption will be increased to $33,000 for this fall’s bills as part of a relief package that phases out the cap over the next three years. The exemption will shrink to $26,000 and $20,000 in the coming two years.
The cap was the brainchild of Cook County Assessor Jim Houlihan.
Guerrero, Houlihan’s spokesperson, said lawmakers would be committing “political suicide” not to provide some relief to homeowners.