Monday, January 5, 2009

Collecting Delinquent Taxes

Channel 9 did a good story today on the amount of delinquent property taxes that are out there. At $63 million, there are clearly far too many property owners and businesses not paying as they should.

Last year, we worked with Treasurer Goering (who is responsible for tax collection) on implementing, for the first time, a tax lien sale for delinquent taxes, which brought in about $20 million. Most of that revenue came because the threat of selling the tax lien to a private collector (who charges a higher interest rate) convinced many to pay up before the sale took place. Then we sold the liens on the remaining parcels for $4 million. These revenues will ultimately be distributed among all the jurisdictions--local jurisdictions, levies, schools, and the County--that receive property tax proceeds.

This year, we will do the same thing--and our goal will be to collect even more of these delinquent taxes. The fact that we followed through on one sale already should provide a lot more motivation for people to pay the taxes they owe prior to the next lien sale.


Anonymous said...

David - what is the BOCC going to do to address people who are having geniune financia; problems? Without a "hardship" clause in the program, we'll be increasing the number of foreclosures in the community against people who are experiencing real financial issues due to the economic climate, medical issues, or other factors beyond their control.
The county really isn't intending to force people out of their homes or subjecting them "predatory" interest rates who are not "willfully" refusing to pay their taxes - are they?

David Pepper said...

Good question. Actually, for the tax lien sale last fall, I, the Treasurer, and the housing counselors who have been doing foreclosure prevention counseling worked together to ensure that such cases don't get caught up in the process--and that those homeowners can instead negotiate a payment plan with the Treasurer. It actually worked out well.

We will do the same in 2009.

Anonymous said...

My understanding is that if the property owner doesn't have at least 1/3 of their delinquent balance to put down, and have the ability to make payments that pay the arrearage off within 2 years (?), then the tresurer's office will not make any arrangements.
Also, when I checked the website, law and materials and through discussions with the local agencies appointed for credit counseling - they said, my understanding is correct.
How are we notifying citizens of the options?
In my research, I found a law that says that the BOCC has the authority, in spite of the payment arrangements specified in the legal provisions under real estate taxes, to make any payment arrangements they deem appropriate and even empowering them to forgive any debt, in whole or in part, due to the county.
The limitations presented to the public, could in fact, be preventing persons who may be able to pay SOMETHING from paying at all because the situation appears inevitable that the county will foreclose and 2) the elderly (or others who may not expect a change in their circumstances)may prematurely sell their property at a loss or let it be foreclosed upon because the guidleines being presented are not consistent with what you are saying.

Also, I have been doing research on the issue of foreclosure and I found out one of the reasons why Ohio foreclosures are so high. When I compare the laws of other states to ours, we are highly punitive, the courts are highly aggressive, and we provide little to no notice requirements prior to foreclosure proceedings being initiated.
In fact, I found a federal law requiring certain notices at the time of default - and I haven't found a single case in Ohio that deals with enforcing it and the foreclosure prevention organizations knew NOTHING about the law, despite it serving as an affirmative defense/special defense against foreclosure.
Technically, in Ohio, other than the federal notice reqs that arent' being enforced, there appear to be no requirement whatsoever prior to initiating foreclosure that will allow the property owner to merely cure the default,and could hamper the advancement of a foreclosure case. Our notice requires full payment of the entire balance upon notice. In fact, we even have a ridiculous law in Ohio that says any failure of a creditor to provide any required notice or process can not be used to abate the advancement of a foreclosure action.
I was amazed at the lack of comprehension both the counseling agencies and even attorneys had of the laws in the state to avoid foreclosure.
What is also perplexing is that creditors are able to intiate foreclosures simultaneously with consumers going through the counseling and "work out" plan process - with out any notice to the parties.
David - we have alot of loopholes to fix in this arena, we have alot of legislation (or emergency executive orders) that need to be passed so that Ohio families do not face harsher penalties in these difficult times than those in other states across the country.

I'm glad that the BOCC is trying to address this - but, unless I'm mistaken, we have a long way to go to make your goal of fairness and equity a reality for all parties, including taxpayers shouldering the burden for property owners who willfully and intentionally refuse to pay their share of taxes.

Anonymous said...

If delinquent taxes are paid to the county will it help stop or delay lay offs that are scheduled to begin again January 13 at Job&Family Services?

If the delinquent money is secured will there be a recall of laid off employees?

David Pepper said...

Like all the property taxes the County collects, the delinquent tax revenues are divided up among all the taxing jurisdictions (schools, levies, local, etc). The County general fund only sees a small percentage of those dollars. In the end, if more are collected in 2009 and beyond, it helps the County's budget situation, along with many other governments--but not by nearly as much as you might think when you first see the $60 million figure. But in the end, yes, collecting more of those taxes will help us lessen the impact of declining revenues.

As for jobs at JFS, those cuts are all coming from state dollars. The department is simply carrying out a cut in state funding that's being made from Columbus. So our ability to collect more money locally is not related to those decisions, and will likely have no impact on future cuts (unfortunately).

Anonymous said...

There are no planned layoffs at Job & Family Services for Jan. 13 or in January. The Director said the agency would reevaulate later this year whether it can reach staffing goals through attrition and retirement.

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