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Taxing bodies consider options if McLean County property tax payments delayed
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Taxing bodies consider options if McLean County property tax payments delayed

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Parkside Junior High School students in Unit 5 leave classes Friday, March 13, 2020, with an uncertainty of when classes will meet. Illinois Gov. J.B. Pritzker has ordered all schools statewide be closed until May 1 to minimize the spread of coronavirus.

BLOOMINGTON — Some of the Twin Cities' largest taxing bodies are considering their options as McLean County leaders weigh postponing the due date for the first installment of property taxes because of COVID-19's impact on taxpayers.

At a special meeting on April 8, the McLean County Board Finance Committee could take action on a 30-day delay, meaning the first installment of property taxes wouldn't have to be paid until July. Property taxes are used to provide funding for any number of government bodies, including schools, airports, libraries, fire districts and more.

McLean County leaders also are considering whether to use a loan program to provide emergency assistance to small businesses in need of cash until federal assistance kicks in during the coronavirus pandemic. The program traditionally is used to attract industry to the county.

Federal and state governments have changed the April 15 deadline to file income taxes to July 15 because of the virus outbreak.

City of Bloomington

"The extension on tax deadlines will delay payments; however, the city receives payments monthly with over 81% of the FY 2020 revenue having been received through March," city Communication Manager Nora Dukowitz said in an email.

"Additionally, while some of the payments we receive each month are for current year estimates, we assume most income tax revenues received in the last couple of months of the fiscal year ending (April 30) are related to calendar year 2019’s earned income. Therefore, while delayed, the revenue should not drop dramatically compared to prior years."

The city plans to present its $230.3 million proposed fiscal 2021 "as anticipated" to the City Council. The vote had been scheduled for April 13, but likely will occur on April 22, Dukowitz said.

"We continue to monitor the budget and potential impacts of COVID-19 closely," she said.

Town of Normal

City Manager Pam Reece said a delay in property tax receipts could be problematic depending on the timeline McLean County establishes for filing. A delay would be balanced with the impact of reduced retail sales, resulting in reduced sales tax proceeds and other reduced revenue due to the pandemic.

“We certainly understand that this is an unprecedented situation and citizens are facing challenging times,” Reece said in an email. “We appreciate the efforts of the McLean County Board to adapt to citizens’ needs. The result of delayed property tax revenue would be evaluated as we move forward and have a better understanding of how our general fund revenues will perform through this crisis.”

The town usually gets a noticeable increase in income tax payments in May, October and February, but receipts are typically stable each month. The town won’t see a severe impact due to the filing deadline moving to July, Reece said.

Reece said the town would be concerned with potential long-term impact of resident losing their jobs.

The 2020 fiscal year budget began April 1. Reece said staff will continue monitoring both revenues and expenses and will address concerns with council members as the pandemic progresses.

Bloomington District 87

Superintendent Barry Reilly said ramifications from a delay could be severe and create cash flow issues. Options would include establishing lines of credit with local banks or issuing tax anticipation warrants.

Properrty taxes are the primary source of funding for Illinois public school districts. “We can manage by putting off expenditures to the extent possible … but we’re in the people business,” which limits where cuts can be made, he said.

Still, “I’m confident we’ll be able to work through things.”

McLean County Unit 5

Business manager Marty Hickman said a property tax delay could cause "a serious problem" because the district needs those payments for cash flow.

"We would likely have to do short-term borrowing if this were to occur," said Hickman.

Heartland Community College

Doug Minter, vice president of business services and institutional effectiveness, said a delay could have “cash flow implications.” However, he told members of the board finance committee this week that Heartland has “enough liquidity” to get through it for several months.

Contact Maria Nagle at (309) 820-3244. Follow her on Twitter: @Pg_Nagle

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