A federal judge has ruled that Cook County’s property tax sale system violates the Fifth and Eighth Amendments of the U.S. Constitution. This decision addresses longstanding concerns about the county’s method of handling delinquent property taxes, which has led to homeowners losing their properties and accumulated equity.
Under the current system, when property owners fail to pay their taxes, the county sells the tax debt to private investors. If the homeowner does not repay the debt within a specified period, the investor can obtain a tax deed, effectively taking ownership of the property. This process often results in homeowners losing not only their homes but also any equity they have built up, without receiving compensation for the surplus value of the property.
In his ruling, U.S. District Judge Matthew F. Kennelly stated that the county’s actions constituted a “classic” violation of the Fifth Amendment’s Takings Clause, which prohibits the government from taking private property for public use without just compensation. He emphasized that the county did not need explicit notice to understand that its practices were unconstitutional.
The case, initiated in 2022, represents over 1,700 homeowners who lost their properties through this tax sale system. The plaintiffs argued that the system not only resulted in unconstitutional takings but also imposed excessive fines, violating the Eighth Amendment. Judge Kennelly concurred, noting that the penalties imposed were disproportionate to the harm caused by unpaid taxes.
One of the plaintiffs, Michelle Kidd, lost her Maywood home valued at $166,220 over an unpaid tax debt of $2,340.44. Despite the significant difference between the debt and the property’s value, Kidd received no compensation for the loss of her equity. Another plaintiff, Goyce H. Rates, lost her Evanston home valued at $389,060 due to unpaid taxes totaling $9,025.45.
The ruling has significant implications for Cook County and potentially for other jurisdictions with similar tax sale systems. While the judge’s decision establishes the unconstitutionality of the current system, further proceedings will determine the extent of the county’s liability and the compensation owed to affected homeowners.
In response to the ruling, there have been calls for legislative reforms to align the state’s property tax laws with constitutional requirements. However, as of now, Illinois remains the only state that has not reformed its property tax collection system following the U.S. Supreme Court’s decision in Tyler v. Hennepin County, which addressed similar issues.
The outcome of this case may prompt Cook County and other Illinois jurisdictions to reevaluate and modify their property tax collection practices to ensure they comply with constitutional standards and protect homeowners’ rights.
For a detailed discussion on this ruling, you can watch the following video: