Cook County Treasurer Maria Pappas on Tuesday praised an Illinois Supreme Court decision that upholds the ability of her office to require bidding among tax-sale buyers to guarantee the lowest burden for homeowners.
"The Illinois Supreme Court affirmed that the Treasurer has the power and discretion to run the tax sale to make sure there is competition among tax buyers," Pappas said.
At issue was a policy implemented at the tax sale in January 1998. Under that new rule, the Treasurer's Office forfeited unpaid taxes if multiple tax buyers simultaneously bid the maximum rate of 18 percent penalty and none followed with a lower bid. When taxes are sold, that penalty is added to the delinquent tax, which the property owner must pay to the tax buyer.
Before the new rule, 95 percent of the taxes sold were going to bidders who demanded 18 percent. After the rule came into play, the auctioneer gained discretion to ask if there were any among the multiple bidders willing to accept less than 18 percent. If there was no response, the taxes were forfeited. As a result, bidding grew very competitive and only a small percentage offered drew individual bids of 18 percent.
Tax buyers, led by Phoenix Bond & Indemnity Co., sued the County over the rule. The Circuit Court issued an order stopping enforcement of the rule. The Illinois Appellate Court reversed the finding, and both sides took the cause to the Supreme Court.
In an opinion authored by Chief Justice Moses W. Harrison II, the Supreme Court found that the intent of the tax-sale law was to award a tax lien to the bidder who demands "the least percentage" in penalty for the delinquent taxpayer to redeem. The Court further found that county collectors may "exercise discretion to accomplish in detail what is legislatively authorized in general terms."
"The appellate court was correct in rejecting the circuit court's narrow view of the collector's authority," the opinion added. "When the General Assembly conferred on county collectors the power to conduct tax sales, it also conferred, by implication, the authority to do all that is reasonably necessary to execute that power."
The opinion stated the Cook County policy is "fully consistent with the general statutory scheme established by the legislature."
The Supreme Court issued no dissenting opinion in the case.