Harvey's Bid for Distressed City Relief Rejected

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The city of Harvey, Illinois has had its request for fiscal relief under the state's Financially Distressed City Law rejected by the Illinois Department of Revenue. While Harvey meets the criteria of being in the top 5% of municipal tax rates, the Department determined the city does not fall within the bottom 5% of tax income per capita required to qualify for the state takeover program.

Why it matters

The Financially Distressed City Law was designed to provide a pathway for the most fiscally strained municipalities in Illinois to receive state intervention and oversight to help address severe budget deficits and service delivery challenges. Harvey's rejection highlights the strict criteria required to access this relief, leaving the city to continue grappling with its longstanding financial troubles on its own.

The details

Under the Financially Distressed City Law, home-rule municipalities in the top 5% of tax rates and bottom 5% of tax income per capita can apply for a state takeover of their finances. This law has only been invoked once before, in East St. Louis in 1990. In Harvey's case, the Department of Revenue determined the city meets the tax rate requirement but does not fall within the bottom 5% for tax yield per capita, making it ineligible for the state relief program.

• The Financially Distressed City Law was enacted by the Illinois legislature.
• East St. Louis invoked the law in 1990, the only time it has been used prior to Harvey's recent application.
• Harvey applied for relief under the law in early 2026.
• The Illinois Department of Revenue rejected Harvey's application in April 2026.

What’s next

Harvey officials have not indicated if they plan to appeal the Department of Revenue's decision or explore other options for addressing the city's fiscal distress.