The city of Peoria is re-enrolling in a state program to collect on their debts, while also launching a new program to forgive some of them.
The Local Debt Recovery Program is a long-running, free service from the State Comptroller’s office for Illinois municipalities. Put simply: it garnishes payments from the state, like tax returns and lottery winnings, to repay outstanding debts to cities, like parking tickets and building code violations.
Peoria’s Corporation Counsel Patrick Hayes says the city has been out of the program for several years and is ready to return.
“We feel that this would be an efficient way to collect some of the debt that's a little frustrating because of the size of the debt and the number of individuals involved,” Hayes said.
As mentioned, the individual amounts are small, but Hayes says the cumulative impact on the city is millions of dollars of unpaid fees. This program will only apply to debts from individuals. Hayes says that in larger cases, like unpaid retail taxes for example, the city would go with a more traditional collection agency method.
There are several other debts the program does not apply to. One example is real estate taxes, which are handled at the county level.
“We're in the beginning stages of the local debt recovery enrollment process,” Hayes said. “Within the next 30 to 60 days, we'll be enrolling certain debts into the recovery program, individuals then may see the impact of that, they'll get a notice.”
At the same time those notices begin to go out, the city will also begin taking applications for the accompanying one-time Debt Hardship Forgiveness Program. The program, approved by the city council at their last regular meeting, offers an opportunity to wipe the slate clean for Peoria residents experiencing poverty.
“One of the things raised by my colleagues on our staff was that if we're going to do a program like this, we need to recognize the impact on our residents,” Hayes said. “Particularly our residents of limited means.”
Eligibility for the program is determined by income and household size. Generally speaking, those with an income at 80% or less of the local median will qualify for full forgiveness. Those at 200% or less of the federal poverty limit will qualify for half forgiveness and a repayment plan.
“Staff’s directed and has the ability to take an application to make sure we're reconciling everything and allow everybody, the city, the individuals to move forward,” Hayes said. “But because it's only available on one occasion, we don't feel there'll be a ,you know, recidivism related to people feeling like there's really no consequence.”
