South Cook News

Gov. JB Pritzker is expected to sign legislation altering the way delinquent property taxes are auctioned, seeking to benefit residents and governments of local communities by reducing the ability of outside investors to siphon off tax income, the Chicago Tribune reported.

"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," said Chicago Democrat Representative Kam Buckner, who spearheaded the proposed legislation.

Delinquent property tax sales serve as a means for taxing entities to recover their owed revenues while affording property owners additional time to settle their bills without risking their homes. However, a study conducted by the Cook County Treasurer's office, "Maps of Inequality: From Redlining to Urban Decay and the Black Exodus," concluded that some private investors exploit a "sale in error" loophole to reverse the transactions and regain their investments, along with accumulated 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 said these loopholes result in an annual loss of at least $40 million for local governments, primarily affecting Black and Latino neighborhoods where the properties are situated. Between 2015 and 2022, researchers identified $277.6 million in sales deemed as errors, including a minimum of $27.7 million in interest refunded to tax buyers, the study said.

As of May 3 of this year, for the 2021 tax year (billed in 2022), a total of 73,733 properties in Cook County had outstanding tax payments, with over 180,000 individuals falling behind on their payments shortly after the December 30 deadline.

As of late, the bill has yet to be implemented. However, WTTW News reported on May 30 that the bill aimed at overhauling the property tax sale system, which the study said has contributed to urban decay, is on its way to the governor's desk.