February 21, 2013
After crunching numbers and getting partial lists of delinquent taxes, Carroll County officials say they will go after $4 million in back taxes owed to the locality.
During the January meeting of the Carroll County Board of Supervisors, county officials stated they believed the county was owed $10 million in delinquent taxes. After getting more accurate numbers, Supervisor Sam Dickson said the county still should go after what it’s lawfully owed.
“During our last meeting we talked about collecting delinquent taxes and we seemed to have started a small war, which wasn’t my intent. My intent was to collect some of the taxes,” Dickson said during the board’s Feb. 11 meeting. “We agreed to add $800,000 in our income budget last year for collecting back taxes, and we have had trouble getting a list to know what we could collect. And of course it is pretty obvious we didn’t know how much was out.”
Dickson said the county thought it had gone through the process to find a list of delinquent taxes. He them asked County Attorney Jim Cornwell to explain steps the board has taken in conjunction with the Code of Virginia to find those numbers.
Cornwell explained that within 60 days of the end of the Fiscal Year, the treasurer can make out lists of delinquent real estate taxes as well as lists of tangible personal property, machinery and tools, and merchants’ capital taxes that are delinquent. In all there is a six-item list the treasurer is supposed to make within 60 days of the end of the Fiscal Year, Cornwell said. After that, Cornwell said a governing body of a county, city or town can request the treasurer to furnish a copy of any of those six items on the list. The governing body may then, as deemed advisable by the treasurer, publish a list of delinquent taxes in a newspaper in the county, city or town of the governing body.
“I am aware that the board of supervisors last year requested the list pursuant to the statute,” Cornwell said. “I am not aware that the board has received it.”
Dickson asked if the board made those requests in writing. Cornwell said he wasn’t sure. He knew the board voted on it, and added he assumed the board also adopted a resolution.
“We adopted a resolution and asked for the list,” Dickson said, adding that the board received a partial list of delinquent taxes from 1991-2008 on Feb. 8. “We are still missing the other part. Of the list we got, it is noted on the bottom there was a little more than $290,000 of delinquent tax out.”
Dickson said the county also received information from its auditing firm, Robinson, Farmer and Cox, stating the county has outstanding delinquent taxes out in the amount of $3,993,255.
“And that doesn’t include the 10 percent penalty or the interest or the administrative fee, so that would put it well over $4 million,” Dickson said. “And that is just real estate (taxes).”
Dickson said the auditor also informed the county that delinquent real estate taxes are deemed uncollectable after 20 years. The time frame is shorter on the other taxes, Cornwell added.
“On June 30, 2012, the county wrote off $450,503 uncollectable delinquent tax. I do know that number also has bankruptcies and some stuff like that you can’t collect,” Dickson said. “And the way Robinson, Farmer and Cox gets these numbers is by historical collection data that they use. So are we reasonably sensible to believe that we have roughly $4 million that we could collect if we have that list? In all honesty we didn’t know what we had. Now we do have a little bit better idea.”
And that’s not including personal property, machinery and tools, and merchants’ capital taxes, Cornwell said. With roughly $4 million in delinquent taxes out, Dickson said he knew Cornwell could collect it for the county if the county authorizes him to do so. The county attorney has collected some delinquent taxes for Carroll recently.
“I run groups. I was originally given 30 properties that were basically owned by one developer and I collected that in full. Unfortunately, I don’t have that figure. It was done before we started this process,” Cornwell said. “Later I was given 54 properties, which I consider to be group one, and I collected $86,736.93 in taxes, penalties and interest. And I was given another group of 58 properties in group two and I collected $131,528.95. And in both of those I have not collected everything out of all those groups. I still have some properties left to sell, but basically…I have collected over $225,000.”
Cornwell went on to say the $225,000 was collected in about a year’s time. Supervisor Joshua Hendrick wanted to know what happens with the interest and penalties on delinquent taxes.
“All of it goes to the county,” Cornwell said. “I charge you nothing for this because I collect my fee out of the property sales or out of the property owners.”
Dickson said his whole purpose in bringing up delinquent taxes was to help the county as it prepares for a new budget year.
“It doesn’t look like we are going to make the $800,000. We might, we have a good start, hopefully we can, but we are getting ready to start another one. But it gives us an idea of how much is out there and how much we think we can collect,” Dickson said. “We are not looking at this past year or the year before. We go down farther than that once we start collecting, so that is the list we are looking for. Also, if anyone has taxes that are due, the treasurer does work out payment plans.”
Cornwell works out payment plans, too. He said in the seven jurisdictions he represents, he has only sold two or three houses in the past 10 years that were occupied. Almost all of the properties he has sold have been rental or vacant properties.
“Most of the properties I have sold, taxes have been owed on it for five years or more as I work through my list trying to keep them from going off the 20 years. And we accept payment plans, and I will work out things,” Cornwell said. “Many times we reduce our fees in order to get the money collected. It is a collection practice. We try to keep it rolling, and we try to work with the property owner.”
Cornwell said if everybody pays their taxes, everybody pays less. Dickson said that was the whole point. Even if the county could collect half of the delinquent taxes, that would be $2 million that could be used to pay for half of a new HVAC system for the schools.
“It could be a lot of things we could do. And I think it is part of our responsibility to try to collect this. We are responsible for it and if you are going to put it in your budget you need to be able to collect it,” Dickson said. “We are not trying to get in a battle in the paper of who’s right or who’s wrong. It’s just that we need the information in order to collect our tax, to keep the tax levy as low as possible. That is our goal.”