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Mecklenburg County gave CARES grants to delinquent taxpayers too

Not only did Mecklenburg County award low-interest loans to businesses that owed back taxes before the pandemic, the county also gave grants to delinquent taxpayers.

MECKLENBURG COUNTY, N.C. — A new report found not only did Mecklenburg County award small business loans to delinquent taxpayers, but the county also gave CARES Act grants to businesses that owed back taxes, according to county records.

Economic Development Director Peter Zeiler shared the report with county commissioners Tuesday. Elected leaders requested further analysis after WCNC Charlotte's Defenders investigation identified more than a dozen Small Business Stabilization Loan Fund recipients that also owed back taxes prior to the pandemic. Tax records showed some of them owed thousands of dollars going back years. Some of the businesses quickly paid up after our story. Others are now the target of the tax collector.

"There are a total of 15 delinquent borrowers identified with a total of $22,373 in back taxes owed," Zeiler wrote in an email. "Five borrowers accounted for $20,460 of that total. Half of the delinquencies are under $260 with the smallest being $13.41. The largest delinquency is $5,394 ... Tax delinquencies are not reported to any of the three credit reporting agencies, nor are checks for delinquencies part of a normal commercial or non-profit loan application process. However, given the County's stewardship of this loan fund, OED and the lending partner, Carolina Small Business Development Fund will ensure all new borrowers going forward will be examined for County tax delinquencies."

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The report found the 15 delinquent borrowers accounted for $376,000 worth (8%) of all $4.7 million low-interest loans awarded.

Following our investigation, the county also ran tax delinquency checks for CARES Small Business Relief Grants.

"Tax delinquency checks have been instituted for the CARES Small Business Relief Grant and the Small Business Revolving Loan Fund administered through OED," Zeiler told commissioners. "Three CARES grantees were found to have minor balances (less than $250) and have also been assigned to a deputy tax collector."

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Commissioner Mark Jerrell previously said he welcomed the improved loan process.

"When you guys find that there are gaps and we find that there are gaps, it's important for us to close those gaps," Jerrell said. "We have to get it right on behalf of the people, we have to use their money wisely."

The county plans on updating commissioners on the status of the outstanding tax collections in the future. So far, tax records show businesses have paid a combined $7,000 worth of delinquent taxes or the equivalent of about a third of the total balance.