Local Taxing Bodies Overpaid by State, Money Must Be Repaid


Published on May 3 2016 2:58 pm
Last Updated on May 3 2016 2:58 pm
Written by Greg Sapp

A recent tax system modernization initiative at the Illinois Department of Revenue has uncovered a misallocation to the Personal Property Replacement Tax Fund that began under the Quinn administraton. The error has resulted in overpayment of an estimated $168 million to the taxing districts that receive Replacement Tax disbursements.

That means Illinois taxing bodies that were overpaid have to pay back the money, even though it wasn't their fault.

Department of Revenue Director Connie Beard said, "We are certainly sensitive to the impact recouping these funds will have on some of our taxing districts. We will be working with the impacted taxing districts to establish a plan to recapture the funds over an extended period of time."

Legislation resulted in the discontinuation of one form and revisions to two other forms, which caused calculation errors associated with the payments for these forms.

The heftiest repayment due in our area is from the Jasper Unit 1 School District, which has to pay back almost $122,000. That's after the district has already had to deal with a reduction in expected revenues from the Newton power plant. 

On the hook for a $21,000 repayment is the Neoga school district, also a taxing body that has been battling fiscal concerns.

Area counties will have to make repayments, too; Clay County just under $22,000; Cumberland County almost $9,500; Effingham County just under $28,000; Fayette County just under $24,000; Jasper County almost $26,000; and Shelby County just over $17,000.

The City of Effingham will have to pay back more than $26,000, while Effingham Unit 40 School District will have to reimburse the State more than $82,000.

Local governments lost their ability to impose personal property taxes on corporations, partnerships and other business entities in the 1970 Illinois Constitution. The General Assembly later approved the replacement tax, which is collected by the State and paid to local governments.