Cook County may owe millions to homeowners over tax sales

Cook County faces possible millions in payouts after federal tax sale ruling

A federal judge's ruling against Cook County is sparking conversations far beyond property taxes. The judge says Cook County might have to pay out millions to thousands who lost their homes in those tax sales.

CHICAGO - A federal judge ruled Cook County may have to pay millions of dollars to homeowners who lost their properties through tax sales.

The ruling centers around homeowners who lost not only their homes, but also the equity they had built up inside them. In some cases, people lost properties over tax debts as low as $1,600.

What we know:

Scott Szala, an adjunct professor at the University of Illinois College of Law, said the case has legal, political and social implications. He said many of the people impacted were seniors, low-income families and people living in predominantly African American neighborhoods.

The decision follows a 2023 U.S. Supreme Court ruling involving a similar case out of Minnesota. The federal judge found Cook County may be liable for taking property without properly compensating homeowners for their remaining equity.

The professor warned taxpayers across Illinois could ultimately feel the financial impact if Cook County is ordered to pay out millions of dollars.

What they're saying:

Scott Szala, an adjunct professor at the University of Illinois College of Law, said the financial impact could still be significant for Cook County and taxpayers.

"The County of Cook and the Treasurer's Office potentially could be facing significant dollars. They claim potentially hundreds of millions of dollars. However, the judge in his opinion, said, wait a minute, once you look at the actual number of people that this will involve, it would amount to probably $15 million a year rather than the hundreds of million of dollars potentially that the county and the treasurer are seeking," Szala said. 

Szala also said the case could eventually impact taxpayers beyond Cook County as Illinois faces broader financial challenges.

"Well, it does affect you. As you know, we're in a fiscal crisis at the present time. It's difficult. The federal government has cut back on funding for various programs, which means Illinois is going to have to tighten its belt fiscally. And so this will add to the burden to take place. The question may be, is it simply going to be the County Cook and the Treasurer's Office, or is there some relief that the general assembly can provide that may be supported by the general assembly itself and all taxpayers, just not the county of Cook," Szala said. 

What's next:

Both sides in the case have been ordered to submit plans for how the case should move forward. If they cannot agree, they will have to file separate proposals with the court. Another hearing is scheduled for next week.