Berrien County loan program helps fund communities
With $11 million in property tax debt, many Berrien County communities and programs stay afloat thanks to a loan the county treasurer applies for.
“It’s just what we do to help communities function at what, I think, the taxpayers think they should be getting for their taxes,” said Berrien County Treasurer Bret Witkowski.
According to Witkowski, 10-percent of the properties in Berrien County are currently ‘delinquent’ – or behind on property taxes.
“Half have something paid on them,” he said. “The other half have nothing paid on them.”
That leaves an $11 million hole needing to be filled right now.
You’d normally see an increase in your taxes or cuts to local programs if your community couldn’t pay its share of that $11 million, but Witkowski and his team at the county treasurer’s office have a solution.
“We borrow that money,” Witkowski said. “And this year it’s close to $11 million. And then we cut checks to those cities, to the villages, to the townships, the schools, the state, and then they have a hundred percent of their operating revenue.”
Where do you find $11 million?
“We actually borrow it from – this year it’s Chemical Bank,” Witkowski said. “It goes out for bids. And then we pay an interest rate on that. And we have to make a monthly payment like you – a mortgage or a car payment – until we get that paid off.”
The program makes it possible for services like Dial-a-Ride, the local airport, and area senior centers to keep doing their thing, even if taxpayers aren’t doing their part by paying up.
Benton Harbor Area Schools will soon get a check for more than $600,000 thanks to the program.
“School property taxes provide over 18% of this district’s total operating revenue,” said Scott Johnson, the district’s chief financial officer, in an emailed statement. “The amount of the anticipated check from Berrien County provides funding equivalent to the annual cost of 10 new teachers.”
After the checks are cut, the treasurer’s office spends a year or two collecting those unpaid taxes until it breaks even.
Witkowski said without this program, you’d notice a difference right away.
“They would notice if we didn’t have it because things would be cut, like now,” he said. “And then you would see cities, especially cities, going like this [making wave motion] in how they operate. It would be very dysfunctional.”
Checks for this year will be mailed out on Thursday, June 8.
Witkowski said his office has been able to pay off every loan it has taken out in recent years.
He said most people are behind on their property taxes unintentionally – due to a miscommunication or oversight – so it’s pretty easy to get people caught up.
Witkowski also said the amount the county borrows each year continues to decrease since the recession.