Where is the second installment of my Cook County property tax bill?

That’s what you’ll hear these days when anyone brings up the subject of Cook County real estate taxes. In recent years, the Cook County Treasurer has issued the second installment bills for these obligations in a reliably timely manner: for the last three years, the second installment has issued in the first week of August, with payment due the first week in September. This timetable has been useful, but aspirational – the County is not mandated to issue the bills on or by a given date, and sometimes the bills are issued after this late-summer window.

Why are Cook County taxes billed the way they are? During the early 1930s, many property owners were unable to pay their property taxes when billed. In 1930, group of such property owners founded The Association of Real Estate Taxpayers (ARET). The primary goal of ARET was compel state and local governments to obey that clause of the Illinois Constitution of 1870 which required uniform taxation for all forms of property, not only real estate. It also advocated rate reductions for property taxes, and for reductions in local government spending. At its peak, the organization claimed nearly 30,000 members. During its existence, ARET’s signature accomplishments were to sue state and local governments to further its goals, and to call for a “tax strike”, or refusal by taxpayers to pay their taxes while the court case was still pending. When the U.S. Supreme Court declined to hear its case in October 1932, the movement largely collapsed, and was defunct by 1933.

Although ARET failed with its larger agenda, collection of real estate taxes remained problematic during the Depression. In 1933, the State of Illinois essentially gave taxpayers a break by deferring the obligation to pay taxes to the following year. From that time on, Cook County real estate taxes have been paid “in arrears”, or for the previous year. By law, the first installment of the tax equals 55% of the total tax of the previous year, and any increase or decrease in the assessed value, and exemptions to be applied, are reflected in the second installment.

Cook County property taxes fund a range of local government recipients, including the City of Chicago, the Chicago Board of Education, the Chicago Park District, and the Metropolitan Water Reclamation District. The City of Chicago’s diverse municipal infrastructure portfolio, including streets, sidewalks, viaducts, libraries, two airports, shoreline improvements, firehouses, police stations, and other municipal buildings, is also paid for largely through the City’s debt obligations. Failure to collect property taxes in a timely manner, the City could fail to make its interest payment on municipal bond debt, due January 1st of each year.

Why are the tax bills being issued later this year? The official explanation of the Cook County Treasurer’s office is that it is upgrading the technology, specifically the Property Tax and Mass Appraisal System and the Electronic Court Document and Case Management System. However, some who are familiar with the situation doubt that the delay could be due to a technology upgrade.

How to prorate the real estate taxes is one of the many issues confronting buyers and sellers. With the limited information available, due in large part to the arrearage payment of these taxes, parties rely on the expertise of their lawyer to counsel them, not only as to the most beneficial choice in this matter, but throughout the transaction. If you are buying or selling real estate, let us bring our knowledge of the closing process to your assistance.

Contact Georgia Beatty at 312-500-8064, or at Georgia.Beatty@gmail.com .