Indiana residents can pay their May property tax installment as late as July 10 without penalty this year in response to the COVID-19 pandemic, and Lake and Porter county officials are preparing for the possibility.

On March 19, Gov. Eric Holcomb signed an executive order that mandates all counties waive penalties for delinquent non-escrow property tax paid within 60 days after the May 11 installment due date, according to a letter from the Department of Local Government Finance.

In response, the DLGF issued a memorandum saying property taxes remain due May 11, “however counties are to waive penalties on payments made after May 11, 2020 for a period of 60 days.”

Under the memorandum, spring installments “may be paid up to and including July 10, 2020 without penalty.”

The DLGF waiver “does not apply to tax payments which have been escrowed by financial institutions on behalf of property taxpayers,” according to the memorandum.

Counties are still expected to mail tax bills by April 15, according to the memorandum.

If local governments need help with “cash flow issues realized as a result of late tax payments,” officials can look toward the Indiana Bond Bank’s Advanced Funding Program, advances from the county treasurer, private loans or tax anticipation warrants or temporary loans, according to the memorandum.

Lake County Auditor John Petalas said the county’s property tax bills are “in the process of being printed” and will be mailed out on time.

Petalas said he doesn’t see the Lake County Government Center staying closed beyond April 7, as the commissioners have instructed, “so bills can be paid.”

The penalty fees being waived shouldn’t affect the county because when the budget is established, county officials don’t calculate possible property tax penalties, Petalas said.

Lake County Council President Ted Bilski, D-Hobart, said “nothing is in panic mode,” and that he hasn’t heard from the county auditor or treasurer about any concerns with late payments.

“I don’t anticipate an issue,” Bilski said. “We did not pass a 2020 budget on 100% collection. We stayed under 100%.”

Porter County Treasurer Michelle Clancy said in an email that the county is counting on receiving escrowed tax payments on time.

“Based on 2019 collections, escrowed payments received in the spring made up roughly 32% of the billed amount, totaling $42,350,000.”

County officials, Clancy added, are hoping that taxpayers who are not facing financial hardship will pay by the May 11 deadline. “It is important to all municipalities to have funds to continue to pay their employees and provide services,” she said.

Assessor Jon Snyder applauded Holcomb’s decision to forgo penalties on late payers. “I feel it will add needed relief to businesses and taxpayers who have suffered in Porter County due to the virus,” he said in an email.

Porter County Auditor Vicki Urbanik said her concern is in the disbursements, because under state statute, property taxes must be disbursed to taxing units by June 30 and that date has not changed.

“Property taxes are the single greatest source of funding for most local governments. That certainly is the case in Porter County,” she said.

She expected tax collections to be low even before Holcomb’s executive order because so many businesses and individuals have been impacted by COVID-19.

Her office is tracking payments and will provide municipalities with an estimate of how much they will receive around the time of the May deadline.

“As soon as they get that information, they can start planning for loans,” Urbanik said, adding her office also will look at how much in taxes has been collected by July 10 and can offer municipalities an advance tax draw to ease their cash flow.

For cash-strapped Portage, a late tax draw that’s smaller than expected will create even more financial challenges, Mayor Sue Lynch said.

“We’re just up in the air. We know we’re going to get a late draw and we know that’s probably going to be short,” she said, adding Portage has already borrowed $10 million to make ends meet and officials were considering an even bigger bond issue but haven’t gotten to that yet. “I think everybody is in limbo.”

Amy Lavalley is a freelance reporter for the Post-Tribune.