DeKALB – The city of DeKalb could get a cut of its debtors’ state income tax and other refund payments if it becomes the latest participant in a statewide debt recovery program.
At its Monday meeting, the DeKalb City Council directed the city’s staff to begin drafting an intergovernmental agreement between the city and the Illinois Comptroller’s Office to participate in the Local Debt Recovery Program. The council will vote on the agreement at a later meeting.
Under the program, the city would send the comptroller’s office a list of people who owe it money. From that list, the comptroller will see whether the person is owed money from the state through a tax refund, lottery winnings or state-issued paychecks. The comptroller’s office then will take money that is owed to the person and give it to the city instead.
City Attorney Dean Frieders quoted news reports that described it as a “win-win.”
“There is no cost to the city for participation,” Frieders said, because the state levies an administrative fee on the debtors.
Not every payment from the state can be withheld. Frieders said prepaid tuition fund payments, disability payments and property tax relief fund payments are exempt from garnishment.