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Worcester County Reduces Early Tax Payment Break
SNOW HILL -- For the first time in over a decade, Worcester County is cutting back on the amount property owners save when they pay their taxes early, but officials don’t expect residents to especially notice.
Emergency Bill 12-4 passed Tuesday scaled back the discount Worcester offers for early payment from the previously mentioned 1 percent to .5 percent. Finance Officer Harold Higgins explained that the former 1-percent discount, which was established in 2000, is unusually steep for the county to keep up with.“I think a 1-percent discount is paying too much for an early payment,” said Higgins.
The discount comes into effect for anyone who pays their property taxes in the month of July, instead of waiting until the next due date later in August or September.“It’s an attraction to pay a bill early on,” said Higgins.
However, that 1-percent discount has prompted the vast majority of property owners to pay in July, creating something of a bottleneck every summer.“Sixty to 70 percent of collections are done in the month of July,” Higgins said.
By lowering the discount, the county will be saving money while also likely spreading out when people are making their payments.
“The ability to offer that discount helps in our cash flow,” said Higgins. “Early payment helps cash flow issues from the county perspective.”
The money that the county saves at the lower discount rate also means it will be able to take advantage of higher interest rates being offered by banks.“The rate is lower for us to put it in the bank,” said Commissioner Virgil Shockley.
Higgins stressed that scaling back the discount does not mean that residents will not still benefit from early payment. Saving .5 percent overall is still, in his opinion, a solid reason to make payments early.
Additionally, anyone who escrows property tax payments through their mortgage company will always see some savings, as banks are legally required to make payments early if a discount is offered.“I don’t see collections going down that much,” Higgins said.
Because it was passed 5-0 as an emergency bill, the discount reduction went into effect Tuesday. A public hearing was held to give residents the opportunity to register comments on the bill, however, no one from the public chose to speak.