SOUTH BEND — Property tax bills will be in the mail soon, but the spring routine, like most things, is being reshaped because of the coronavirus.
A 60-day waiver from the state on penalties for late payments has raised concerns about when tax money might arrive, and making payments in person — which many property owners favor — looks unlikely.
“I think there’s a lot of taxpayers that will just pay on time because that’s just the way they are,” St. Joseph County Treasurer Mike Kruk said. “But when times are so unpredictable maybe even some of those people might think … should I hold onto my cash just in case?”
An executive order March 19 from Gov. Eric Holcomb kept the May 11 due date for spring property taxes but waived penalties for late payments through July 10. The waiver does not apply to tax payments that have been escrowed by financial institutions on behalf of property taxpayers, money that presumably is ready to be paid out.
In St. Joseph County, about $36.3 million in property taxes due in the spring is paid from escrow accounts, Kruk said.
But another $121 million in property taxes due in May isn’t paid from escrow and is potentially eligible for the 60-day late payment penalty waiver, he said.
Given the uncertain economic environment, Kruk fears property taxpayers facing a delayed penalty might choose to keep their money in hand a little longer.
If a lot of them do, he said, it could put various entities that levy a share of the property tax rate — cities, townships, school districts, libraries, etc. — in a “big hurt” with a lower-than-expected tax settlement in June.
Kruk said he feels pretty certain May payments will be down because of the delayed penalty.
Larry DeBoer, an economist with Purdue University, agrees. He said some property taxpayers are likely to delay paying either because of hardship or “strategic” money management.
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