The Hennepin County Board gave tentative approval Tuesday to allowing late payment of first-half property taxes without penalty in response to the stress caused by the coronavirus pandemic.
The proposal would allow property-tax payers who owe less than $100,000 annually and don’t escrow to pay by July 15, instead of May 15, without penalty. Those who owe more than $100,000 in property taxes would be able to apply for the deferred payment without penalty through a portal Hennepin County expects to post, if the proposal receives final board approval next week.
The Ramsey County Board is expected to take action next week on a similar proposal. Payment dates are set by the state and can’t be changed by counties, but counties do have the authority to waive penalties for late payment.
Hennepin County Commissioner Mike Opat said it was “unfortunate” the state wasn’t taking action on property taxes rather than the counties. “Maybe some people will follow suit with what we’ve done here,” he said.
Ramsey County Commissioner Victoria Reinhardt agreed. “We can only do so much, and we’re trying to do what we can,” she said in an interview. The county’s goal, she said, is to help residents and businesses without jeopardizing revenue that jurisdictions need to provide services.
In St. Paul, where most county residents live, property taxes and state aid are the two biggest general fund sources.
“If we were to delay the May property tax payment, we would have cash flow challenges probably by late June or early July,” John McCarthy, St. Paul’s interim finance director, told the City Council last week.
Crow Wing County, where Brainerd is the county seat, has taken action to allow later payments without penalty for non-escrowed homestead properties. If one of the homeowner’s primary wage earners was laid off, a family can defer payment without penalty until July 15. The county offered a similar arrangement to businesses closed by Gov. Tim Walz’s executive order.
Hennepin County’s waiver came with a caveat for taxpayers from County Administrator David Hough. “If they have the money to pay it, then pay it on time,” he said, adding that partial payments were encouraged when possible.
Counties and cities are concerned about cash flow amid the pandemic, which has strained resources and resulted in thousands of layoffs. For instance, Hennepin County has only $2 million left in an emergency reserve account of $10 million that was expected to last the year.
Dave Lawless, the county’s chief financial officer, said about half of Hennepin’s property taxpayers escrow, or pay a portion of their taxes with their mortgage payment. Their payments account for about 30% of property tax collections.
Hennepin County’s proposal does not address second-half property tax payments, which are due Oct. 15. Commissioner Jan Callison was already worried about that one.
“That’s going to be the really tough payment,” she said.
Staff writer Shannon Prather contributed to this report.