'We want to guarantee fairness': Lawmakers aim to tighten up tax sales

News-DemocratFebruary 11, 2011 

— Metro-east state legislators have filed legislation aimed at ensuring integrity in the auctions for delinquent property tax debts.

State Sen. Bill Haine has introduced a bill requiring that tax sales be videotaped. The bill also is designed to prevent bidding from ending in a tie.

In the House, Rep. Dwight Kay's legislative proposals include one that would require county treasurers to use an automated bidding system.

Haine, D-Alton, cited recent Belleville News-Democrat articles about Madison County's tax sales.

Haine said the articles "described a process which discouraged free bidding at lower rates. The local county policy made public review difficult by prohibiting videotaping of the proceedings."

In Illinois, investors, known as tax buyers, can pay a person's property tax debt. The tax buyers make money by charging the property owners a penalty rate, or, if the property owner doesn't eventually pay up, the tax buyer can take the property.

The penalty rate for each piece of property is determined at the treasurer's annual tax sale. In most counties, the sale is conducted like a reverse auction, where buyers undercut each other with lower bids.

But witnesses say former Madison County Treasurer Fred Bathon conducted the auction like a bid opening; multiple buyers would simultaneously shout 18 percent, then Bathon's office would award the bid to whichever buyer appeared to shout first.

The winning bidders were often buyers who made big contributions to Bathon's political fund.

From 2006 to 2009, the last three years of Bathon's tenure, the average penalty rate awarded to tax buyers was either 18 percent -- the highest rate allowed by state law -- or 17 percent.

The average fell to 9 percent after Bathon retired. In some comparable counties, the penalty rate never rose above 5 percent and was as low as 1 percent.

"With this Senate bill, we want to guarantee fairness in the bidding process and further mandate a public record of the process of delinquent tax sales," Haine said. "Lower interest rates charged to delinquent taxpayers usually result from an open bid process."

Under Haine's bill, each buyer's bid would be disclosed to the other bidders. Bidders then would have the opportunity to submit lower bids. If there's still a tie, the treasurer could declare the taxes forfeited.

"The people of Illinois deserve greater transparency and accountability from their government at all levels. This bill seeks to remove any questions that may arise regarding potential conflicts of interest," Haine said. "The delinquent taxpayer must be assured that the rate paid to the tax buyer is set through an open bid process."

House bills

In the Illinois House, Rep. Dwight Kay, R-Glen Carbon, has filed legislation that would require treasurers to use a computerized bidding system "that is programmed to accept the lowest redemption price bid by a tax purchaser."

Another bill filed by Kay would prohibit tax buyers from making campaign contributions to candidates for county treasurer.

Contact reporter Brian Brueggemann at bbrueggemann@bnd.com or 239-2511.

Belleville News-Democrat is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service