Cook County Board President Toni Preckwinkle’s office awarded stopgap loans to 32 villages, library and school districts worth $191 million, an effort to dull the impact of this fall’s property tax delay that nonetheless left many suburban agencies already in dire financial straits with less money than they asked for to help make ends meet.
More Top Picks Best Neck Cooling Fans
Several officials praised Preckwinkle’s efforts, and the payouts also left $109 million in the loan pot, according to data received through a Tribune open records request.
The Cook County Board initially excluded Chicago Public Schools from the loan program but then pledged to work with the cash-strapped district if there were funds remaining after suburban applicants received their payments.
But Preckwinkle’s administration suggested last week that the window has now closed, and the school district will not be able to avail itself of the unearmarked $109 million. That comes after the school district did not officially apply for the leftover money, which a CPS spokesperson told the Tribune was an inadequate amount to meaningfully help with its yawning shortfall.
Preckwinkle rolled out the property tax bridge loan program earlier this summer, offering enough money to cover two months of expected property tax revenues to eligible suburban schools, libraries and villages. She did so while also announcing tax bills would again be delayed, the latest blow to taxing bodies that rely on the money.
‘Needed lifeline’
Several applicants shot for the moon, according to the bridge loan data. School District 57 in Mount Prospect requested $20 million and got back just shy of $6 million. Skokie/Evanston School District 65 asked for $68.3 million and received just under $23 million. The city of Berwyn asked for $13.5 million and received $5.6 million.
Most applied before the county announced the official date bills would be mailed and said they worried about lengthy delays getting their money back.
Several south suburban local governments were among the group that requested much more than they got. Many of those communities have troubled budgets and some of the lowest property tax collection rates in the county, which can create a vicious cycle that increases financial pressure on property owners who do pay.
City of Harvey officials did not respond to a request for comment, but sought $24 million from the loan program. The county ultimately loaned the city about $1.7 million.
Harvey’s City Council voted unanimously last October to apply for the so-far rare designation of a Financially Distressed City, which the state denied in April. At the time, Mayor Christopher Clark said that the city was $164 million in debt due to a combination of factors, including a trail of expensive scandals left by predecessor Eric Kellogg, and chronically low tax collection rates. The 2023 rate was about 58%, the third-lowest of any suburban municipality, meaning the city fell $24 million short of target.
The village of Robbins, which applied for $350,000, received $150,000, according to the data. Its collection rate is just slightly lower than Harvey’s.
The village of Dolton applied for $9.5 million and got back $1.85 million. The village is still embroiled in lawsuits regarding alleged financial mismanagement on the part of former Mayor Tiffany Henyard. In February, the village filed suit against Fifth Third Bank seeking $2 million that officials allege the institution improperly paid out in fraudulent checks signed by Henyard.
Separately under pressure to pay down a $33.5 million judgement related to a deadly police chase, the village in July opted to pay over the next decade. Officials held out hope they may not have to raise property taxes to do so, a solution that village attorneys said would mean “economic devastation.”
Other districts said they based their request on concerns that distribution holdups would strike again. Last year, Cook County Treasurer Maria Pappas’ office struggled with contractor Tyler Technologies to get money from county coffers out to districts. She muscled through some solutions as delays dragged on, in some cases direct-depositing some money around Christmas, but issues and confusion lingered.
If last year’s bill delays were a blow to budgets, distribution troubles were the uppercut. Several districts were underpaid, overpaid or couldn’t make heads or tails of where their finances stood because the reporting portal they typically could check wasn’t working. The portal reports how much money districts are receiving by fund and tax year, which officials rely on for financial planning and audits.
This year, the treasurer expects distributions from September bills to begin landing in October.
“We have distributed all funds collected through July. We anticipate August distributions to occur within 2 week(s) and further distributions to occur weekly after that,” Pappas spokesman Mike Puccinelli said in an email to the Tribune.
The distribution portal is still not fully functioning. Puccinelli said all but 318 districts (of nearly 2,000 across the county) are receiving accurate distribution reports through June 30. “Tyler is working to provide accurate reporting on the remaining districts and to fully automate its reporting system for the future,” he said.
New Trier Township High School District 203 — which is 91% funded by local property taxes — received a $22 million loan from the county’s program. The school system originally asked for $40 million, deputy superintendent Christopher Johnson said, “based on the district’s projected cash-flow needs if property tax distributions were delayed again, not on an expectation that the full amount would necessarily be awarded.”
Last year’s installment was five months late, Johnson said, and the district considered borrowing to make do.
“We appreciate the work that Cook County is doing to modernize their assessment and tax collection system, which will benefit taxing bodies for generations to come,” Johnson said. “One of the unintended consequences for school districts of implementing the system is a third year of delayed property tax payments.”
West Northfield School District 31’s superintendent said in a note to her local county commissioner that the $3.3 million they received “was a needed lifeline,” but they were disappointed about a lack of communication lately from Pappas’ office about the timing of distributions.
“The application process was straightforward, the support was excellent, and the program ran seamlessly,” Superintendent Erin Murphy said in the letter she shared with the Tribune. “Most importantly, receiving the loan meant we could make payroll in September while we worked through other solutions as we wait for property tax revenues to arrive.”
School District 21 in Wheeling requested $34.2 million, but received $18.9 million — just over half what it asked for. Superintendent Michael Connolly similarly said the district asked for more, given the pre-K-8 district’s experience with delays last fiscal year.
Connolly said the bridge loan provided “surety” the district would have the resources to cover regular expenses if property tax distributions are significantly delayed again.
Since tax bills went out on Sept. 1, he said, “we are more hopeful that we will not encounter the unacceptably long delay we experienced last year.”
The loan came as property tax bills are two months later than in a typical tax year, which means they are due by October. The delay again has created a potential cash crunch for districts during the wait for their cut — often a main revenue source for local governments — and added to the pile of complaints about the county’s decade-long property tax system upgrade.
More Top Picks Best Outdoor Thermometers
In a revenue pinch, some districts opt to borrow short-term cash, get a line of credit from their bank or issue “tax anticipation” notes or warrants, which cost extra in interest. Preckwinkle aimed the loans at districts with limited borrowing capacity or low cash reserves, offering interest-free money with a simpler application.
Her office, meanwhile, will get automatically paid back when property tax revenues come in.
Relatively few districts applied for the loans in years past. To encourage sign ups, Preckwinkle’s office this year broadened eligibility and offered technical assistance for less-experienced leaders to perfect their applications. Preckwinkle’s team said the efforts helped.
“Schools, local governments and libraries across Illinois received nearly $200 million, which represents the most loans and dollars distributed in the history of the program,” spokeswoman Hannah Fierle said in an email. “We remain committed to supporting the local taxing districts and the longer-term work of fixing a fragmented property tax system.”
Help for CPS unlikely
While Preckwinkle initially said whatever leftover loan money that suburban districts didn’t win could possibly be used to help CPS, Fierle on Wednesday suggested that door closed on Sept. 1. “In accordance with the ordinance, once the tax bills were mailed, the County’s ability to issue tax anticipation warrants ended,” Fierle said.
“We were in conversation with CPS regarding the bridge fund loan and we considered all applications that we received,” she said.
CPS officials earlier this year said the $300 million set aside for the entire county loan program barely covered a single month’s payroll. The Chicago Teachers Union pushed to be part of the program anyway, arguing every dollar would help stave off potential layoffs or program cuts.
CPS has borrowed billions to cover short-term costs in recent years, including through tax anticipation notes tied to property tax delays. Recent rounds of borrowing led to “substantial, unrecoverable interest costs,” district spokeswoman Sylvia Barragan said in an emailed statement, and also held up payments to the teachers pension fund.
In all, the cost of property tax delays this year “has now surpassed $10 million—a figure that will continue to grow until the tax cycle is closed,” Barragan said.
Though it has had ongoing communications with the county, “CPS has been unable to access any reduced-interest loan programs that would sufficiently bridge these massive funding gaps,” her statement continued. “Now with only approximately $100 million left in the County’s loan program, it is even more apparent that the size of the program is inadequate for the needs of CPS.”
In an emailed statement, Illinois Federation of Teachers’ chief of staff Kurt Hilgendorf criticized the county for “sitting on funds in their loan program that could help keep money in the classroom and deciding to help every district in the county but Chicago.”
The delays and insufficient state funding “don’t just force the district to borrow to fill the unnecessary gaps, but now they’re the cause of a negative outlook that could make that borrowing more expensive,” he said.
Ratings agency S&P revised its outlook on CPS debt to “negative” earlier this week, citing a range of issues in addition to the property tax delays. That includes a drop in federal funding, deteriorating cash and rainy-day balances, and “notable increased operational spending despite a long period of enrollment declines.”
The revision means there is a one-in-three chance of a downgrade in the next year.
The district’s foggy financial picture is “exacerbated by a lack of structural budgetary discipline, as the board relies on significant assumed, yet unconfirmed, state funding to balance its budget for fiscal 2027,” the agency wrote.
IFT sued Pappas’ office on behalf of its members — including Chicago and suburban locals — in late July. Their aim was to get bills out the door sooner and for the county to pay back districts that took a financial hit because of prior billing delays.
The Cook County State’s Attorney, which represents county officials in such lawsuits, sought an extension in court Thursday and intends to file a motion to dismiss.