BLOOMINGTON — Pantagraph-area counties took in more than $10 million in early property tax payments last year, potentially savings taxpayers money under the new GOP tax law but wading into disputed legal territory.
Ford, Livingston, Piatt, Tazewell, and Woodford counties accepted $10.7 million in prepayments, setting up residents to claim an extra year's worth of local property taxes on their federal returns for 2017 before a cap on that practice is introduced for 2018.
McLean County did not allow prepayments, however, due to the short window for the county to implement a system and concerns about the legitimacy of such payments. DeWitt County also did not offer prepayment.
"It was such a fast turnaround. We had seven days to figure out what to do, and we didn't want to do it wrong," said DeWitt County Treasurer Gloria Wills.
While Ford, Livingston and Piatt usually allow residents to prepay property taxes, Tazewell and Woodford offered the service for the first time in 2017, and officials said the change made them very busy leading into the holidays.
"We were shocked. I really didn't think it was going to be $5.8 million," said Tazewell County Treasurer Mary Burress of that county's prepayments; Tazewell takes in about $210 million in property taxes each year. "We had lines out the door for seven solid days."
Woodford took in an even greater percentage of its annual tax bills: $2,893,848.31 in prepayments, versus $75 million in annual property taxes.
“We were pretty busy; things were hopping in my office for a few days,” said Woodford County Treasurer Melissa Andrews. “That was a lot to collect in a short period of time and on such short notice.”
Burress and Tazewell County State's Attorney Stewart Umholtz agreed "there's no law to prohibit" taking the early payments, and taxpayer demand swayed officials to make the change.
"We thought this was a win-win," she said. "If (taxpayers) feel it's helping them, I feel we should offer the service, and we're gaining interest for the local taxing bodies."
Andrews said Woodford will gain about $20,000 in interest. Other officials were less sure about their totals.
"Depending on interest rates, the prepayments will earn approximately $66 a month in interest," said Treasurer Tim Pankau. "Piatt County, however, does not do it for the generated revenue. That is a small amount for the bookkeeping required to account for these prepayments. Piatt County accepts prepayments as a service to our taxpayers."
Piatt took in $795,000 in early payments, up from $71,000 during the previous year. The county takes in about $31 million in annual property taxes.
Ford took in $410,000 in early payments, said Treasurer Judy Hastings.
"An average year there would be between $80,000 and $90,000 in prepays," she said. "(Our) 2017 total of taxes was $27,444,201.04. The interest would be yet to be determined."
Livingston took in $850,000 in prepays, a huge leap from $16,000 the year before. The county takes in $64 million per year in property taxes.
Ford and Livingston counties let residents prepay up to 90 percent and 70 percent, respectively, of 2017's property tax bill for 2018. Piatt, Tazewell and Woodford let residents pay 100 percent.