Cash Strapped Illinois Accelerates Property Tax Collections

In a futile attempt to stay solvent, the state of Illinois has resorted to a trick I have not seen before, accelerating property tax collections.

Until this year, property taxes have been collected in two equal installments. This year it's 55% in the first half, 45% in the second half.

Here is an Email from "Abundance" describing what has happened.

Hey Mish

It must be getting bad here in Illinois. I opened up my first tax installment and was surprised to see that it was $300-$350 more than I expected.

It turns out that taxes were in fact NOT raised. There was a note that said that "the Illinois Assembly voted to require that 55 percent of annual real estate taxes be collected during the first installment."

This must be the equivalent to California's withholding an additional 10 percent in income taxes. I guess that way they can collect more on those houses that are foreclosed on this year. Nothing like having the taxpayers finance the state's cash flow problems.

Moreover, I read that the state is now paying in 90 days where they had previously paid within 45 days.

The end of the year is going to get ugly. Can you imagine giving Cook County 55 percent of the majority of their annual revenue and telling them to save it for the rest of the year?

I'm not sure how mortgage companies are supposed to retain escrow, since all the laws are written toward a normalized monthly payment. Nobody has the political will to raise taxes. People spend so much on getting into office that they do anything to stay in office. What a mess.

"Abundance"

Political Will

For more on the mess Illinois is in, please see School Bills Due But State Can't Pay: "There is No Money"; Let the War on Public Unions Begin.

The system is flat broke and the state of Illinois is bankrupt. Meanwhile unions refuse to even compromise. At this point compromise is not needed. A taxpayer revolt and all out war on unions, graft, pension promises, and corrupt politicians is.

Let the war begin.

School bills are funded entirely by property taxes. That should help explain the 55% installment game.

Inquiring minds might also be interested in Illinois Careens Towards Bankruptcy; Governmental Collapse Coming.

Democratic governor Pat Quinn's idea to save Illinois is to raise the state income tax a whopping 50%. See the Huffington Post article Fighting Illinois Tax Increases for some details.

Politicians not only lack the political will to raise taxes (at least most of the Republicans), they all lack the political will to take on unions and the pension mess. Moreover, I have not heard one peep about the legislators cutting their own salaries or benefits.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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