Property tax collections are up due to more bank owned properties
More property tax revenue is an unexpected benefit of lenders taking back so many properties from homeowners in Washington County, AK.
Banks typically pay their taxes on time, while owners in serious financial trouble often do not, officials said.
Real estate and personal property tax collection due this year are up — both in total and as a percentage, according to the Washington County Collector’s Office.
That’s good news for schools, the county and the cities that depend on tax revenue to pay bonds, make payroll, fund operations and pay bills. However, a banking professor warns the benefit of lenders paying more taxes will eventually be offset by lower property values.
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The vast majority of property taxes goes the schools — 80.4 percent, said Roger Haney, Washington County treasurer. The county gets nearly 10 percent, cities get 8.3 percent and the library gets 1.2 percent, Haney said
The size of the checks sent to the schools, county and cities are based on the collection of taxes throughout the year, Haney said. Timely collection matters.
“It’s real important,” Haney said. “For the schools, it’s their bread and butter.”
Cities are more affected by hard economic times than schools because most of their revenue comes from sales taxes. Counties rely on a mix of both.
“The sales tax varies from month to month. It varies a lot depending on the economy, on whether they are buying here,” he said. Taxpayers may not do something they did in past — like eat out, he said.
Property tax revenue is more predictable because that’s one bill most people try to make sure they pay, Haney said.
Collection Rebounds
Total property tax collection received by deadline has increased every year since 2004, even though the percentage of people paying on time fell steadily from 95.1 percent in 2005 to 89.6 percent in 2008. The current year’s collection rate is 91.1 percent, according to a report by the collector’s office.
The total amount of property taxes billed grew from $87.76 million in 2004 to $147.1 million in 2009, according to the report.
Lower property values caused by the market slowdown have not yet impacted tax revenue because 2009 taxes are based on the assessed value at the beginning of 2008, officials said.
Lenders Pay
If property owners don’t pay their real estate taxes, then the lenders will eventually pay them after they foreclosure on the property.
For example, Metropolitan National Bank paid more than $152,600 in delinquent taxes from 2007 and 2008 on 35 parcels, according to list provided by the collector’s office.
Three other financial institutions made the top 50 list of delinquent taxpayers, paying more than $86,000 this year. The top 50 payers of delinquent 2007 and 2008 taxes paid a combined $1.9 million, according to the report.
Source: http://www.nwanews.com/news/2009/nov/08/property-tax-collection-better-last-years/
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