Unpaid Property Taxes Rise Sharply
The number of Americans not paying their property taxes amid the recession and the brutal housing collapse has increased sharply - more than doubling in some parts of the country.
At a time when the nation's housing crisis has put millions of Americans at risk of losing their homes through bank foreclosure, a growing pile of unpaid bills has put tens of thousands more in danger of losing them to tax seizures. That has caused multimillion-dollar shortfalls for some already-struggling local governments that rely on property taxes to pay for everything from schools to police.
Because property taxes are almost always collected locally, there is no single national measure of just how many people have fallen behind. But tax collectors and treasures in communities across the country say they've seen a sharp jump in the number of delinquent homeowners and businesses as the nation's unemployment rate grew. They're bracing for even more unpaid bills ahead.
"We fully expect a higher level ahead than in the last few years," says Kenneth Parrish, the treasurer of Kent County, Mich., and president of a national association of tax collectors.
Tax collectors from South Florida to Wisconsin and Cleveland have noted the increase. In Cuyahoga County, Ohio, which includes Cleveland, nearly 8 percent of taxpayers didn't pay tax bills due this month, double the rate of four years ago, says Deputy County Treasurer Robin Darden Thomas. Now the county is struggling to collect about $400 million it's owed in back taxes, she says.
"Hopefully when the economy picks up, people will be able to pay," Thomas says.
A look at the problem across the U.S.:
- In Charleston County, S.C.,@ more than 13,500 taxpayers didn't pay yearly tax bills due in March, up from about 10,000 two years earlier, says Mary Scarborough, the county's collector of delinquent taxes. "We have more foreclosures too. And if people aren't paying the banks, they're not paying us."
- In Nashville,@ about 5 percent of taxpayers don't pay their bills each year, but this year officials expect an additional 3 percent will fall behind, city and county tax collector Charlie Cardwell says.
- In Lee County, Fla.@ - one of the places suffering most in the nation's foreclosure crisis - more than 43,000 taxpayers didn't pay bills due this year, compared with about 31,000 two years ago, according to county records.
Property tax laws vary, but usually if taxes aren't paid within two or three years, authorities can seize the property. Before that happens, officials usually try to set up repayment plans, and in many cases, mortgage lenders will step in first to protect their investment, says Dina Mumford, the treasurer in Outagamie County, Wis.
"But eventually those taxes get paid plus interest or we take the home," she says.