Cook County’s ongoing property tax computer problems could now produce a secondary effect on school districts: a potential increase in the recapture levies for refunds related to property tax assessment reductions. As the delayed refunds are finally issued, school districts may see a corresponding abnormally large increase to their property tax recapture levy refunds in future levy years.
Cook County’s technology overhaul has been hampered by delays resulting from computer glitches. As a result, property tax bills were issued late, and tens of thousands of refunds were not issued. According to one report, at one point more than $206 million in refunds for over 91,000 properties sat unpaid due to computer problems. The Cook County Treasurer has reportedly begun to release refunds after turning to artificial intelligence tools to help clear the backlog.
School districts could also be affected as the refunds are released. Under the recapture levy statute under Section 18-233 of the Property Tax Code, Cook County school districts automatically receive a one-time increase in a future year’s levy to recapture the lost revenue due to refunds from certificates of error, PTAB decisions, or circuit court specific objection orders. The County Treasurer must track the amount of the refund for each 12-month period.
As the backlog starts to clear, refunds that would ordinarily be spread out over a longer period are being processed within a short timeframe. Consequently, the refund totals certified by the Cook County Treasurer over this 12-month period could be significantly higher than normal. As a result, some Cook County school districts could be facing a noticeably larger recapture levy added to a future year’s extension.
Superintendents and school business officials should know that the recapture levy is one-time increase to the levy. Due to the unique problems facing the County Treasurer, that one-time increase could be larger than normal before returning to typical patterns. It would be prudent to carefully review budgets, communicate with auditors, and confer with legal counsel to understand the effects of the recapture levy and its effect on school district finances.
Please consult with Tony Senagore on any questions about the recapture levy and its potential effects on school finances.
