RACINE COUNTY — Landowners in the county who are delinquent on their property taxes may soon find themselves paying through their state income tax refunds.
After a limited first run of the Tax Refund Intercept Program garnered the county about $1 million from property owners nearing foreclosure this year, Racine County Treasurer Jane Nikolai said the program will expand next year.
In addition to pulling in overdue taxes owed to the county, she said the program has already increased the number of people making payment plans with the county and reduced the number of foreclosures.
“We’re utilizing the tax intercept to collect the delinquent taxes, to encourage people to go on payment plans if they can’t pay in full, and to take personal responsibility,” Nikolai said.
In the future, anyone who has not paid delinquent taxes, does not have bankruptcy protection and has not set up or stuck to a payment plan with the treasurer’s office by December — when the bill for the current year’s property taxes arrives — will be at risk of having all or part of their income tax refund diverted to pay for delinquent taxes, according to Nikolai.
“Part of owning the property is paying the taxes,” she said. “If they can’t afford to or don’t want to pay the taxes, they need to sell the property.”
While government bodies like the Racine County Circuit Court use this program, Nikolai said her office is only the third county treasurer in the state to adopt it, after Portage and Milwaukee counties.
Nikolai explained that she implemented the program in Racine County to cut down the number of foreclosures, a labor-intensive process to multiple offices that can cost the county thousands of dollars, often with minimal returns.
She noted that property owners sometimes do not pay their property taxes because they believe the home is not valuable enough for the county to foreclose or because they want the county to foreclose so they can get rid of the property.
Even if the problem is just forgetting to pay, Nikolai said tapping the income tax refund got attention this year, spurring people to arrange payment plans with the county, sell their properties instead of waiting for foreclosure and even pay off their taxes after the refund did not cover the entire debt.
“We’re going to dramatically increase it in the future,” she said. “It’s a lot less work than the foreclosure process, without the expense.”
Nikolai said roughly 100 people were affected by the program this year. She expected that number will increase to about 250 next year.