A $6.5 million effort to streamline Minnesota's entire property tax system is instead delaying property tax bills normally mailed out by now in more than a dozen counties.

In theory, nobody's taxes should be affected, and property owners still will have time to meet every deadline.

But the fact that the delays come just as most people are plodding through their income tax filings is creating headaches, especially for homeowners on fixed incomes hoping to take advantage of state property tax refunds.

"It's clearly an inconvenience, and we apologize for that," said Chris Samuel, manager of property records and revenue for Ramsey County, the largest county affected. In the metro, Washington County also is experiencing delays; Dakota, Anoka and Hennepin counties are not.

At issue are 2010 property tax statements, which are normally mailed out by now and include bills for the two property tax installments due this year. State law targets March 31 as the date for mailing them, but that deadline was blown, officials said.

Washington County expects to get them to property owners late this week or next week, said Kevin Corbid, director of property records and taxpayer services. Ramsey County hopes to get its 160,000 notices out by April 15, but Samuels cautioned that further delays are possible.

The first bill is due May 15, meaning there will be considerably less time than usual for taxpayers to make sure their money is available.

For the many property

owners who put money in escrow and have their mortgage company pay the tax bills, Samuel said, there shouldn't be any problem.

He hedged his words because he couldn't guarantee the delay wouldn't trip up mortgage companies, but he said officials are working with lenders to ensure they're aware of the situation.

And here's the situation: In 2008, 28 counties teamed up on a plan to upgrade their outdated tax-management systems to a system called Manatron, a national Web-based system that is supposed to reduce government costs and allow better access to data.

"It'll provide all kinds of services we don't have now," Samuel said. "Of course, we realize that's no help to people right now."

Corbid said the problem, in part, is the result of the need to program Manatron to handle the quirks of Minnesota's property tax structures, especially special assessments.

"One, we're just learning to use all of the systems," Corbid said. "Two, Minnesota has a very complex property tax system, and all of that needed to be programmed into this computer software. So we're finding — not big issues — but there would be a small subset of parcels that had this specific thing happening to them."

In short, the system was miscalculating the tax owed in a few cases — a potentially incendiary error for government.

The statements also include information necessary to complete Form M1PR, the state property tax rebate form. For many homeowners in a market of falling property values, that rebate would be a buck or two, if anything. But if the property tax burden is a large enough proportion of an owner's income — as is often the case for retirees living in homes that have risen in value over the years — the refund would be worth the effort.

Samuels said volunteer accountants with AARP have complained that the delays mean their clients seeking help with tax preparation will have to schedule a second consultation. Form M1PR isn't due until August, so people shouldn't have any problem getting their refund applications submitted in time.

Other counties converting to Manatron include Chisago, Isanti, Stearns, Wright and Carver. Officials with the consortium of counties converting to Manatron could not be reached Wednesday to determine the extent of delays in other counties.

Elizabeth Mohr contributed to this report.