Prenzler: No one blew the whistle on tax auctions

By The Madison County Record | Oct 3, 2010

To the Editor:

A recent series of investigative articles by the Belleville News-Democrat, exposing the less-than-competitive tax auctions run by the Madison County Treasurer's office, have made Madison County the laughing stock of Illinois.

But it's not a laughing matter. Over 10,000 taxpayers, who could not pay their taxes on time, over a four-year time period, were forced to pay interest rates on their late taxes of 18% (and increasing later), when, for example, in Champaign County, late taxpayers paid interest rates of less than 2%.

As a CPA, I have studied the operations of many Illinois county treasurer's offices. Thirty-eight Illinois counties use the excellent software produced by Joseph E. Meyer & Associates, a company based in Edwardsville. This automated bidding eliminates conflicts of interest and preferential acceptance of bids.

In a tax auction, tax buyers often begin bidding at the highest rate (18%) allowed by Illinois law. One tax buyer may bid 18%, followed by another who bids 17%, and so on, until the lowest bid wins. In Champaign County, the resulting average interest rate ended up to be less than 2% over a 3-year period. That's a successful auction (for a strapped taxpayer).

In Madison County, the tax buyers all bid "18%" and the treasurer's office picked various tax buyers to be the winner.

In one year, over 2,500 late tax bills were sold, all at 18%, with only eight less than 18%. And it doesn't end there. The interest rate just "begins" at 18% for the first six months.

According to Illinois law, if the tax payer can't pay his back taxes within the first six months, the interest rate increases to 36% for the next six months, 54% for the next six months, 72% for the next six months, and 90% for the next six months.

The Belleville News-Democrat reported that Fred Bathon, Madison County Treasurer from 1998 to 2009, received $141,125 in donations from tax buyers. There are only two Illinois counties (out of 102 counties) where county treasurers take political contributions from tax buyers: Madison and St. Clair (Treasurer Suarez, $21,050 from 1994 - 2010).

Have things changed?

The Spring 2010 tax auction was improved, resulting in an initial 9% average interest rate (then 18%, then 27%, etc.), still almost double Champaign County.

Yes, Fred Bathon retired, but Rachel Bathon, Fred's daughter (who makes over $78,000/year), and who ran the auctions with Fred, is still deputy treasurer. The Democrat machine (all countywide elected officials in Madison County are Democrats) actively observed these "tax auctions."

Not one person blew the whistle. The newly appointed Democrat Treasurer Frank Miles has taken almost $20,000 of political contributions from tax buyers this year. Other Madison County Democrats have taken thousands of dollars of from tax buyers. Why do Madison County Democrats take money from tax buyers from other counties?

Madison County needs more businesses that create good jobs. These bad practices in the Madison County Treasurer's Office hurt the county's reputation, and only help tax buyers and those who receive their political contributions.

In 2006, when I ran, I promised not to take political contributions from tax buyers. I renew that pledge in 2010. I pledge to run the tax auction according to "best practices" (like Champaign County and other counties) to achieve the lowest possible interest rates for late taxpayers.

Kurt Prenzler, CPA
Republican challenger for Madison County Treasurer

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