A plan for Republican Gubernatorial candidate Mark Neumann to let property taxpayers switch to a monthly payment plan is raising concerns from some local government officials.
City of Madison Comptroller Dean Brasser says the proposal, which would allow taxpayers with a mortgage to stop using escrow and pay their taxes directly to municipalities, has some legal implications because it could require mortgage agreements to be completely rewritten. Brasser says escrow is typically used to guarantee the taxes on a mortgaged property are paid on time.
There are also implications for those who usually claim what they pay on their income taxes. Brasser says many taxpayers currently pay their bill as soon as it arrives in December, so they can claim it the following spring on their income tax returns. Switching over to a monthly payment plan would require them to wait another year before they could continue that practice.
Many property owners already take advantage of existing options to pay their taxes in installments. Brasser says having even more people go that route could result in cash flow issues for government bodies, including school districts. He says not having large lump sum payments at the start of the year could result in more borrowing to cover government expenses.
Overall, Brasser says there are some concerns about the logic of the plan.
