It’s a standard practice to help the local jurisdictions manage their cash flow. The estimated amount of delinquent taxes is lower than in recent years, possibly reflecting a recovering economy. Last year, the board authorized borrowing up to $40 million. [.pdf of delinquent tax resolution]

After March 1, taxing jurisdictions – including cities, townships, schools systems and libraries, among others – turn their delinquent taxes over to the county, and are reimbursed for that amount. The county treasurer then assumes responsibility for collecting these delinquent taxes. This is a standard procedure that’s conducted annually at this time of year. The borrowed funds are used for cash flow purposes, to fund operations for the first half of the year.

Under the state’s General Property Tax Act, the county treasurer is required to collect delinquent taxes. Section 87 of the act allows the county to set up a revolving fund – which was done several decades ago – so that the county can borrow the estimated amount of delinquent taxes, then pay in advance to all the taxing jurisdictions the amount that they would have collected if there had been no delinquent payments.

This brief was filed from the boardroom of the county administration building at 220 N. Main St. in Ann Arbor. A more detailed report will follow: [link]