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TAX NEWS - June 2010

Illinois Tax: Putnam County treasurer: Tax mix-ups will be corrected

Putnam County Board heard from office holders Monday about a tax error involving several taxing districts.

"There's been a lot of hype about a wrong tax bill," treasurer Kevin Kunkel said.

He explained the beginning of the situation, saying tax bills were mailed May 6. On May 7, he was informed by fire district trustee Larry Brown that there was an error. After the matter was looked into, it was discovered the error involved Marquis Energy LLC, an ethanol plant in Hennepin which is in the Enterprise Zone, and three taxing bodies - Illinois Valley Community College, Hennepin Township Road and Bridge District and Granville-Hennepin Fire Protection District. The ethanol plant had no hand in the incorrect property tax abatements, nor did any of the three taxing bodies involved.

The original bill sent to the ethanol plant was $256,000. The corrected bill was for $327,000, Kunkel said.

County clerk Dan Kuhn said he made the mistake which resulted in the tax bill errors.

"My office is responsible for tax rate calculations," he said.

The rate-setting equalized assessed valuation (EAV) was incorrect, at $42 million less than it should have been, according to Kuhn. As a result, two districts - the fire protection district and Hennepin Township road and bridge - were extended more tax dollars than they should have been. IVCC, on the other hand, was extended $145,677 less than levied this year, Kuhn said.

Next year's tax bills will have a prior year's adjustment to correct the error. For example, the fire district, which had levied for $250,000, will receive $400,000 this year, and only $100,000 next year as the surplus from this year is subtracted off next year's total, he said.

The matter isn't quite as cut-and-dried for IVCC, however, since eight counties overlap into that district. The other counties have been informed they'll have to do a prior year's adjustment on next year's tax bill as well.

In Putnam County, the shortage for IVCC will be corrected by collecting an extra $1.50 or so from the average homeowner on next year's tax bill.

Kuhn said he will try to develop better communication with North Central Illinois Council of Governments to make sure an error like this won't occur in the future.

"It was an oversight on my part," Kuhn said.

He said the Illinois tax code is complicated, and errors are unfortunately made at times.

"There's mechanisms in place to make corrections and that's basically where we are at," Kuhn said.

David Mallery of Hennepin, an IVCC trustee, said he wanted to make a few comments on the tax error - not speaking on behalf of IVCC, but as a resident of the county. Mallery was bested by Kuhn earlier this year when both ran for the Democratic Party's nomination for the office of Putnam County Clerk and Recorder.

Mallery said he was "encouraged" by what he had heard during the board meeting about the tax error - specifically that corrective actions were being taken to prevent future mistakes.

He mentioned several other errors that have impacted various taxing bodies over the past six years.

One past mistake cost the county thousands of dollars because of mailings that had to be sent out afterward, Mallery said.

He thanked Putnam County State's Attorney James Mack for determining, through his research, that mailings didn't have to be sent out in this case. He estimated Mack saved the county $15,000 to $20,000 by researching notification methods.

He said Kuhn's "careless and hurried mistake" could have implications in future Truth-In-Taxation hearings for the taxing entities involved.

"The (county) board doesn't have a legal authority to force the county clerk to do his job. But I believe you hold the purse strings," Mallery said. "I believe most of you truly care about the taxing bodies."

Mallery said he hopes the board will encourage the county clerk to come up with a written plan to improve his process.

County board chairman Duane Calbow asked Mallery if he had contacted Kuhn prior to the board meeting to express his concerns.

Mallery said he had not.

Kuhn responded to Mallery's comments.

"I will take full responsibility for this problem," he said, adding there was no cover-up involved. "You didn't come to me and request any information."

An error in a prior year involving IVCC was not caused by Kuhn's office, but by a failure on IVCC's part, Kuhn said.
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