GREENFIELD — Property tax bills should start reaching the mailboxes of Hancock County residents late next week, but with a state clerical error resulting in nearly $3.9 million in refunds to local homeowners, county officials are bracing for plenty of questions.
Local officials last month announced a state clerical error in 2013 property tax bills, resulting in refunds this spring for everyone who claims a homestead property tax exemption.
The refunds will be in the form of a credit on the bills. Those who pay via a mortgage company – the majority of homeowners – can see how much their refund was by noting the “prepayments” line in the upper right-hand corner of their tax statement. Those who pay the county directly will notice the credit in the “prepayments and credits” line in the lower right-hand corner of the spring bill.
“We’re waiting for all the phone calls because we’re going to get a bunch,” said Hancock County Treasurer Janice Silvey.
Silvey said bills will be mailed Thursday and payments are due May 12 and Nov. 10. While the credits are good news for homeowners, Silvey said it’s bound to be confusing to people because they will owe one amount in the spring, another amount in the fall. For some, the prepayments and credits line could include other credits.
Auditor Robin Lowder said for the majority of homeowners, the prepayment line will reflect just the amount refunded because of last year’s clerical error. But sometimes people pay their taxes several times a year and overpaid, or paid the county for a ditch assessment for a sewer lien, and the transaction could show up as a prepayment. The best route to get answers, she said, is to ask the county treasurer’s office staff to explain what the credit line means.
County officials decided not to send out an explanation letter with the tax statements this year. It would have been costly, they say, and they thought at the time that those who pay via their mortgage escrow would not be able to see the refund.
Lowder said in retrospect, perhaps the county should have sent an explanation letter; but many residents would have had questions on their bills anyway, letter or not.
“We’re not sure really how this is going to work,” Lowder said. “We’ll take it as it comes, and if any problems come up, we’ll just deal with it as the problem comes.”
The average amount each homeowner will be reimbursed is $175.41, though the range of reimbursements is from 12 cents to $2,394. The error affected 61 percent of county properties, at 21,877 homes.
Hancock County was one of only four in the state that was affected. Local officials heard from the state auditor’s office late last year, but were given little explanation as to how the mistake happened.
The mistake was in calculating homestead exemptions on property taxes in Hancock, Tipton, Montgomery and Pulaski counties. For all four counties, $6.3 million was to be reimbursed. Because Hancock County had the most properties, it had the largest total.
The problem was caused by a mistake on a spreadsheet used to calculate the credits. State Deputy Auditor Steve Daniels said in an email that an employee of the office copied and pasted a monthly distribution amount from a worksheet instead of an annual distribution amount, causing the error in four counties. Since then, Daniels wrote, the state office has strengthened the department’s checks and balances to ensure correct information is provided to the counties.
Local officials have been frustrated they’re left to clean up the mess. Another complication is dealing with paperwork of the property owners who have since sold their homes.
A total of 782 affected properties have changed hands since last spring, making it difficult to track down the original homeowner. Lowder said the county plans to take out a newspaper advertisement listing all of those people with instructions on how to fill out a claim with the county.
Lowder said she hopes the state auditor will reimburse the county for that expense, but she doesn’t know yet how much it will be. Other than the cost on manpower, Lowder added, the error is not digging too deeply into county coffers. The vendor that prints tax forms did not charge the county additional money to list the credits.