Isle Pre-Pay

About the Program

Category: Financial Management (Best in Category)

Year: 2011

As Isle of Wight County moves further away from its agricultural roots, citizens are less influenced by the cash flow of farming. Since the County has become a retirement destination and the average age of its citizenry is increasing, a growing portion of the County’s population is now living on a fixed income. In 2007, the County began fielding concerns from citizens about having such a significant tax bill due on December 5th, as this date coincides with the time of the year when many people see increases in their household expenditures, such as heating costs and holiday spending. In response, the Board of Supervisors asked the County’s Treasurer and Commissioner of Revenue to begin exploring ways to improve the tax collection process. The Treasurer and the Revenue Commissioner agreed that adjusting the current tax due dates was not a viable option, due to the costs of beginning bi-annual assessments for personal property taxes, as well as the majority of the citizenry’s reluctance to change. Instead, they determined that the promotion of an option already available to taxpayers – prepayments – could alleviate much of the financial strain associated with the County’s tax due dates. Through a series of revisions made to the program, Isle Pre-pay is now accessible to over 10,000 eligible real property tax accounts, as well as non-delinquent personal property tax payers. The program initially encouraged residents to make quarterly payments against their estimated property tax bill, but has since moved to a system consisting of ten monthly payments for both personal property and real property tax accounts. Any accounts with a zero balance due at the October bill generation did not receive a tax bill. Any accounts with a credit balance were given the option of applying the credit to the next year’s bill, applying the credit to another tax bill, or the taxpayer could request a refund of the credit amount. Isle Pre-pay has been extraordinarily successful, and currently has more than 3,000 participants. Personal property delinquency rates have been reduced by more than 6 percent since the program began, and the Treasurer’s office frequently receives letters, emails, and phone calls from citizens that say how much the Isle Pre-pay program has benefitted them. During its inaugural year, the program generated over $700,000 in prepayments. Further, the County is benefitting from the program as well. It helps to spread the County’s cash flow more evenly across the year. Historically, there had been a large influx of cash when taxes were due, but very little otherwise. Since its inception, Isle Pre-pay has brought in more than $4.3 million in off-cycle payments to the county.