Saturday, June 27, 2009

Unpaid Taxes Hurting County

By Rosalie Rayburn
Journal Staff Writer
          Sandoval County is feeling the effects of the recession as it tries to collect property taxes.
        In recent weeks, county staff have handled phone calls daily from individuals and investors who weren't able to pay their property taxes by the May 10 deadline.
        Individuals cite job losses or personal financial problems. Investors, some of whom bought multiple properties in Rio Rancho during the real estate boom years, say they're stuck with homes they can't sell in the current depressed market.
        For the county, which depends on property taxes to help fund operating costs and programs, it means cinching in an already tight budget, said Larry Polanis, the county's chief financial officer.
        Polanis presented the situation to Sandoval County commissioners at a recent meeting.
        By the end of May, he said, the county had collected $80.6 million, or about 91 percent of the $88.4 million billed. Bills for 2008 property taxes were sent out in November and became delinquent in early May.
        The county typically is able to collect about 94 percent of the total taxes owed by this point in the year, Polanis said.
        The roughly $7.7 million in uncollected taxes relates to 21,056 properties. Of those, 14,943 are owned by individuals and 6,113 are owned by investors. One investment group owns 330 properties, Polanis said.
        Last year, investors represented only about 500 to 600 of the properties that were behind on tax payments, he said.
        Investors county staff have talked with say they can't sell their properties and face a cash flow crisis. Several have inquired about the consequences of delaying payment.
        Polanis said the penalty is 1 percent of the tax amount due, up to 5 percent of the total. They must also pay interest, which accrues at 1 percent of the tax amount due as long as it is delinquent. Many have opted to delay payment, instead of borrowing money to pay, while they wait for the economy to improve.
        "It's a business decision," Polanis said.
        Facing a roughly 3 percent drop in expected income means the county will likely have to trim programs and expenses for fiscal year 2010 and beyond.
        "We need those tax collections," Polanis said. "We're no different than any other business."
       

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