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Tuesday, June 9, 2015

Taxpayers Get Refund Because of 3-2 Vote on Tax Levy Ordinance

Last year, a group of taxpayers filed a tax objection lawsuit in McHenry County circuit court to request a refund of a portion of the property taxes due and paid in 2014.  They argued that the City of Crystal Lake's tax levy ordinance was invalid because it was not approved by the requisite number of votes. In December of 2013, the City Council had voted to approve the tax levy ordinance by a vote of 3-2. The minutes of that meeting indicate that the motion to approve the tax levy ordinance passed. However, in their lawsuit objecting to their taxes, the taxpayer plaintiffs argued that four affirmative votes were required to pass the tax levy. The circuit court agreed, ruling in favor of the taxpayers, and ordering McHenry County to refund the City portion of the property taxes due and paid in 2014 to the taxpayer plaintiffs.  Taxpayer, WKS Crystal Lake, LLC v. Miller, 14 TX 10 (April 7, 2015).

Given the significant impact on City revenues, it comes as no surprise that the City has filed a notice of appeal. It will be interesting to see how the appellate court deals with this case.  There is  no discussion about the difference between the statutory language in 65 ILCS 5/3.1-40-40 (requiring a concurrence of a majority of members holding office) and the City Code language (requiring the affirmative vote of the elected members).  These distinctions may be important in the appeal.  

What was surprising is the circuit court's refusal to validate the City Council's subsequent ratification of the ordinance. The court questioned the City's power to ever ratify a defective ordinance because there is no statute or ordinance that expressly authorizes this.  Yet, there are cases where a court has recognized a public body's ratification of an action. See e.g., Branigar v. Village of Riverdale396 Ill. 534 (1947).  It's not clear if this "no ratification authority" position is limited to tax levies or all municipal actions.   

The court's decision impacts not only the City's revenues, but also the Crystal Lake Public Library's property tax levy. By statute, a municipal public library levy is included in the municipality's tax levy ordinance.

Post Authored by Julie Tappendorf


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