Appeal from the Appellate Court for the Third District; heard
in that court on appeal from the Circuit Court of Peoria County,
the Hon. Stephen Covey, Judge, presiding.
MR. JUSTICE UNDERWOOD DELIVERED THE OPINION OF THE COURT:
On November 16, 1976, the Peoria County Board adopted a resolution authorizing the county collector to print instructions on 1976 tax bills that taxpayers paying real estate tax installments by mail should direct such payments to the county collector, while taxpayers paying in person could make their payments to either their township collector or the county collector. The town of the city of Peoria and Mildred Arends, the township collector, thereafter filed a verified complaint in the circuit court of Peoria County against the County of Peoria and its county collector seeking a declaratory judgment that the resolution was contrary to law, and an injunction against the defendants prohibiting them from notifying taxpayers in the township that taxes could be paid to the county collector prior to the first day of September in any tax-collection year.
In its April 22, 1977, order granting a preliminary injunction, the court found that for at least the preceding 20 years real estate tax bills for the plaintiff township had instructed taxpayers to pay the tax at the township collector's office prior to September 1 and at the county collector's office thereafter. The court further found the proposed taxpayer instructions were contrary to law and enjoined the defendant county and county collector from notifying the taxpayers of the plaintiff township that they might or should pay any real estate tax to any officer other than the township collector prior to September 1. The order further required the county collector to include with the tax bills a separate sheet directing pre-September 1 payments to be made at the township collector's office.
The county and county collector thereafter filed an answer and five-count counterclaim against the town and the township collector. The counterclaim alleged that the township and town collector did not possess authority to invest collected taxes; that they did not have authority to retain the interest earned upon the investment of such collected taxes; that the county collector has sole authority to invest proceeds of taxes paid under protest; and that the retention by the town of interest on the collected taxes constitutes a fee for services which is proscribed by the Illinois Constitution (Ill. Const. 1970, art. VII, sec. 9(a)). The parties thereafter stipulated that the town collector invested collected taxes and paid the interest earned therefrom to the town of the city of Peoria.
On April 12, 1979, the circuit court ordered a permanent injunction restraining defendants from suggesting to taxpayers in the plaintiff township that real estate taxes could, prior to September 1, be paid elsewhere than at the office of plaintiff township collector. The court further held that the township collector had the authority to invest collected taxes in interest-bearing accounts, but that the township had no authority to retain the interest earned upon such investment and directed payment of such interest to the county collector for deposit in the county corporate fund. Plaintiffs and defendants appealed and cross-appealed from that order.
The appellate court affirmed in part and reversed in part (85 Ill. App.3d 427), holding that the township collector had exclusive authority to collect taxes prior to September 1, had inherent authority under the Revenue Act of 1939 to invest the collected taxes, and was entitled to retain the earned interest for the township. We granted defendants' petition for leave to appeal.
The issues before us are (1) whether the town collector for the town of the city of Peoria has exclusive authority to collect from residents annual real estate taxes prior to September 1, (2) whether tax funds collected by that office may be invested by it, and (3) whether such investment income may be retained by the township collector and used for township purposes.
The boundaries of the city of Peoria and the town of the city of Peoria are coterminous, and the city treasurer serves as town collector. (See Ill. Rev. Stat. 1975, ch. 139, pars. 127, 131.) This fact is relevant here only as it affects the obligation of the township collector in making final settlement with the county collector. (See Ill. Rev. Stat. 1975, ch. 120, par. 680.) County treasurers are by statute ex officio county collectors in their counties. Ill. Rev. Stat. 1975, ch. 120, par. 657.
The tax-collection process commences with the delivery of the tax books to the collecting officials. Section 172 of the Revenue Act of 1939 (Ill. Rev. Stat. 1975, ch. 120, par. 653) provides in part:
"Sec. 172. The respective county clerks shall deliver the books for the collection of taxes to the county or town collectors on or before the thirty-first day of December annually."
Thereafter, the county clerk must certify to the county collector the amount of taxes to be collected and names of the town collectors:
"Sec. 173. On the delivery of the tax books to the town collectors, the clerk shall make a certified statement setting forth the name of each town collector, the amount of taxes to be collected and paid over for each purpose for which the tax is levied in each of the several taxing districts and furnish the same to the county collector." (Ill. Rev. Stat. 1975, ch. 120, par. 654.)
While the statute still speaks of "books," we are told by the parties here that Peoria County tax assessment and collection information has been computerized in recent years, and no "books" are presently utilized. The information is stored, and the computer equipment operated and maintained, by the county. The township collector's office is connected with the county ...