Gov. J.B. Pritzker (D-IL) | Gov. J.B. Pritzker / Facebook
Gov. J.B. Pritzker (D-IL) | Gov. J.B. Pritzker / Facebook
Gov. J.B. Pritzker of Illinois was expected to give approval recently to legislation aimed at revamping the state's process of selling unpaid property taxes, altering the manner in which delinquent property owners may have their taxes subjected to auction.
According to the Chicago Tribune, the legislation led by Kam Buckner, a Democratic representative from Chicago, seeks to empower local governments, residents and community developers by readjusting the tax system. Pritzker was anticipated to approve the measure on Thursday, May 25.
"Over the past two generations, the tax sale system has evolved — whether intentionally or not — into a vehicle to strip wealth and drive inequality in some of our most vulnerable communities," Buckner said.
At present, the sale of delinquent properties allows taxing entities to recoup their unpaid revenues while providing property owners with a grace period to settle their bills without the risk of losing their homes. Nonetheless, a recent investigation carried out by the treasurer's office unveiled that a small subset of private investors exploits a legal loophole known as the "sale in error." This enables them to overturn the transactions and reclaim their investments, including the accrued interest.
"This bill seeks to rebalance the tax sale system in the interest of local governments, residents and community developers who actually want to reinvest in their neighborhoods from the ground up," Buckner said.
The study indicates these legal gaps led to an annual deficit of no less than $40 million for local governments, disproportionately impacting Black and Latino communities where these properties are located.
From 2015 to the end of a two-year period, researchers identified a total of $277.6 million in sales categorized as errors, with a minimum of $27.7 million in interest refunded to tax buyers.
As of May 3 of this year, for the 2021 tax year (billed in 2022), outstanding tax payments affected a total of 73,733 properties in Cook County, with over 180,000 individuals falling behind on their payments shortly after the Dec. 30 deadline, the Chicago Tribune said.
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