Published: August 20, 2008 10:53 am         

Tax collection plan hits a snag

County must offer installment options for certain taxpayers

Cass County’s decision to have one tax collection date this year was made to save the money and hassle of collecting twice in consecutive months. A single collection would also benefit the area schools and governmental entities that rely on the tax draws to operate.

Now, the county must make some unexpected adjustments to its plan to avoid possible penalties imposed by the Indiana Department of Local Government Finance.

Cass County Council President Ralph Anderson was contacted last week by a representative of the DLGF informing him of some stipulations the county must meet to have one tax collection on Nov. 10.

At a minimum, the county must offer an installment plan to taxpayers with non-escrowed homesteads — a group that makes up about 20 percent of residential property owners.

“This is going to create more work and I apologize for that, but we have no option,” Anderson said during a council meeting last week.

The only alternative, Anderson said, was to set up two collection dates. However, because the DLGF has already approved Cass County’s plan for a single collection on Nov. 10, that option is no longer available.

Anderson said he was uncertain whether any county officials knew of the stipulations before the decision was made to have one tax collection date.

He said the council intended to pass a resolution at its Sept. 3 meeting that would offer a limited installment plan for non-escrowed homesteads only. The plan will stipulate that 50 percent of the total tax bill, or what would have been the spring payment, will be due on Nov. 10. After that, 25 percent of the remaining bill will be due on Dec. 10 and the balance will be due on Jan. 10.

“The state was afraid that this small percentage of the population may be overburdened if this doesn’t transpire,” said Anderson.

Cass County is not the first to run into this problem as Tippecanoe County announced last week it would offer six installments for the same class of taxpayers.

If Cass County chooses not to offer installments, the DLGF could penalize the county, including possibly withholding future funding.

“If I want to get money to the schools and the taxing districts, then I have to make sure as the president of the council that the council passes this resolution,” said Anderson.

As it is, 90 percent of taxes in the county will be due on Nov. 10.

Anderson said he is worried about offering the installment plan to only a small fraction of county taxpayers. However, to offer the plan to everyone would have created even greater delays in getting tax draws to the schools and governmental entities that need those funds to operate.

“Whenever you give one group of individuals different options than everyone else, it creates conflict,” Anderson said. “But this was a mandate — we had to do this. ... Yes, this might upset some people, but most people know that taxes are due on May 10th and November 10th. If you did not make any installments on May 10th, then the taxes are due on the final settlement date. It’s not like they had no knowledge of this.”

Even so, the tax statements, which the treasurer’s office estimates will go out on or before Sept. 5, will not indicate who is eligible for the installment plan. Anderson said council’s resolution will clearly stipulate that only non-escrowed homesteads are eligible, and taxpayers will need to follow up with the treasurer’s office if they aren’t sure whether they qualify.

Carla Knapp can be contacted at (574) 732-5150 or via e-mail at carla.knapp@pharostribune.com