Property-Tax Delays Cause Widespread Distress in Chicago

What happens when property tax revenue doesn’t come in on time due to computer glitches, but local governmental entities still need to make payroll and keep the lights on?

In the case of Chicago Public Schools, it means racking up interest from a line of credit to pay those bills, plus interest owed to the pension fund to make up for what the fund would have earned over time had the payments been made in a timely manner.

The two-month delay (so far) of a $247 million pension fund payment has translated into $2.4 million in interest owed, and it is estimated that millions more in interest will be owed to the fund and line of credit by the time property tax revenue is actually delivered.

The situation stems in part from Cook County’s inability to deliver second-installment property taxes on time due to computer system update glitches, and the Chicago Tribune editorial board called for County Board President Toni Preckwinkle to consider compensating CPS and other school districts and taxing bodies for those payment delays when she releases her proposed county budget in October.

How did Cook County get into this mess?

An overhaul of the county’s computer systems — work that was contracted to Texas-based Tyler Technologies — has amounted to years of missed deadlines on the project. That means property tax bills have still not been mailed out for payments that should have come due June 30. It is unclear when the tax bills will be mailed out, and property owners have a month to pay once those bills are received. That could mean actual revenue won’t fill county coffers until potentially the end of October.

It isn’t just school districts racking up the expense of paying bills on borrowed dollars, but every government entity for which the county’s tax office collects taxes. That’s $8 billion in assessments caught in limbo, and potentially could balloon Chicago’s $1 billion budget gap.

Earlier this year, Cook County Assessor Fritz Kaegi fixed hundreds of property misclassifications after a months-long audit — at least 620 properties were misclassified or undervalued during the 2023 tax year, resulting in an estimated $444 million in missed taxable value — but questions remain over how many errors are still unresolved.

With tax bills arriving closer to the end of the year, it could also have implications on the March 2026 Democratic primaries. Kaegi has lost the support of the Cook County Democratic Party, which is throwing its endorsement behind Lyons Township Assessor Patrick Hynes.

— Eric Weilbacher