Public Act 102-112 extended the deadline to pay Cook County first installment property taxes for tax year 2022 from March 1, 2023, to April 1, 2023. By law, Cook County first installment property tax bills are 55% of the prior year’s total and are usually due March 1; the second installment, which seeks the remaining amount of property taxes due, is supposed to be paid by August 1. Because of significant delays by taxing officials that we previously reported, 2021 tax year second installment bills were so delayed that payments were not due until December 30, 2022. As a result, taxpayers received a 2022 first installment bill immediately after paying a 2021 second installment bill. The change in the law will alleviate some of the burden to taxpayers caused by issuing back-to-back property tax bills.
Although the extension is welcome news to taxpayers, even a short delay in the collection of property tax revenues may strain some school districts’ budgets. But school districts have options to maintain their cash flow during the one-month delay. Through interfund loans and permanent interfund transfers, school boards can manage their current cash allocations among their operating funds. Additional cash inflow can also be obtained by “anticipating,” or drawing against, the delayed property taxes by issuing tax anticipation warrants or notes or obtaining a line of credit, all payable when the property taxes are ultimately received. School boards also can anticipate future state aid payments through lines of credit or state aid anticipation certificates and obtain advances of other streams of revenue through personal property replacement tax notes, revenue anticipation notes, or teacher orders. All these alternatives must comply with specific statutory procedures, and the practicality of their use will depend on the timing since lead time for approval varies. As a result, consultation with legal counsel is advised. If your district would like to explore short-term cash-flow options for weathering the expected delay in property tax collections, please contact Steve Richart, Heather Brickman, Tony Senagore, or any other attorney in our Corporate Practice Group.