Illinois Revenue Department Rejects City of Harvey’s Bid for ‘Financially Distressed’ Status

HARVEY, Ill. — The State of Illinois has turned down a proposal to classify the City of Harvey as a “financially distressed” municipality.

Previously, the City of Harvey convened a special city council meeting on October 16 to debate the potential declaration of financial distress under Illinois state regulations.

In October, the Harvey City Council approved the distressed designation and subsequently requested that the state assume control of the city’s financial affairs. However, this appeal was rejected by the Illinois Department of Revenue in February, as indicated in a letter accessed by ABC7.

Confirming the state’s decision, Harvey city attorney Keri-Lyn Krafthefer informed ABC7 on Friday that the outcome was anticipated. She suggested that state legislation should be amended to simplify the process for cities seeking state assistance.

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Currently, municipalities within Illinois do not have the option to declare bankruptcy.

Municipalities can’t declare bankruptcy in Illinois.

As of October 2025, Harvey has a 52% property tax collection rate, bringing in less money than it spends, even though it has the third highest property tax rates in Cook County. Also, 35% of state revenue & restricted funds gets diverted by the State Comptroller to fund the fire pension.

Illinois Department of Revenue Director David Harris also confirmed the denial to ABC7 Friday.

“Two criteria city has to meet in order to be considered a financially distressed city. One is being in top 5 of the highest tax rate, other being in the lowest 5 of the tax per capita,” Harris said. “They met one criteria not the other.”

READ MORE | Questions raised as Harvey seeks approval from state to be declared ‘financially distressed’ city

Harvey Mayor Christopher J. Clark died Jan. 30. The Harvey City Council elected Shirley Drewenski as acting mayor in February.

“If we can bring brighter minds to our community to help us to move forward, if we can find ways to deal with such a sizeable amount, then we welcome that,” Clark said in October as the “financially distressed” declaration request was made by the city.

The city had said it needs $51 million to operate and only receives $30 million, and there was a bill in Springfield that would provide immediate relief.

“If the legislature and governor determine law should be changed, we will do what law says to do,” Harris said.

The City of Harvey laid off about 10% of its municipal workers in August amid their financial crisis.