Many Athens County residents pay their property taxes on time every year, and still more benefit from those taxes on a daily basis. What a lot of people don’t know, however, is how the county goes about collecting unpaid or “delinquent” property taxes.
Athens County Treasurer Ric Wasserman says his office is responsible for collecting delinquent taxes, a job that can be tedious, time consuming, and sometimes fruitless. Since he took office last year, according to Wasserman, he’s made collecting delinquent property taxes a major priority.
“In a normal week, I probably spend about 40 percent of my time calling delinquent taxpayers, just trying to get people to come in and pay,” Wasserman said in an interview last Monday. “I’ve gone to people’s businesses… signed the payment plan right in their business. I’ve worked with long-distance outfits on the phone.”
There are a number of reasons why a person might be delinquent on his or her taxes, Wasserman said, and it’s not always because he or she just doesn’t want to pay them.
“There’s certainly some of that,” Wasserman acknowledged, though he added that in other cases, a person may have died or otherwise abandoned the property. Properties that are dilapidated or abandoned can be taken over by the Athens County Land Bank, Wasserman said, which is the only legal way that the county can forgive those delinquent taxes.
“In some cases, there’s bankruptcies, either business or personal, where the property’s just been kind of left there… Sometimes it’s just these sort of things where we’re never going to collect that,” Wasserman said, citing as an example a bankruptcy situation where the property owner is a business that no longer exists.
Meanwhile, some people simply forget, fall behind on, or are unaware of the delinquent taxes owed on a property. “Not a whole lot has been done over the years on those (cases),” Wasserman said, “but I’ve really made it a big priority to try to collect from those people.”
By aggressively reaching out to any contacts available in relation to the property owners, Wasserman said his office has “had a lot of success getting those companies or individuals to get into payment plans to start paying the taxes.”
Payment plans are based on the back taxes an individual owes. He or she must make a down payment and an agreed-upon monthly payment until the past-due balance is paid off. Wasserman said his office tries to set up the plans so that the payments are automatically withdrawn from a savings or checking account.
“Compliance is much greater when we can just pull the money directly from their account rather than relying on somebody to write a check,” he said.
In email Friday, Wasserman stated that his office has started 189 payment plans, covering a total of 458 individual parcels, since Nov. 7 when the “delinquent billing deadline” occurred.
Another tool Wasserman discussed on Monday is the process of selling tax liens, a practice that former county Treasurer Bill Bias introduced to Athens County while he was in office. The term “lien” means the right of an individual or other entity to keep possession of property belonging to another person until a debt owed by that person is repaid.
For example, if a person buys a car on a loan, the individual keeps the car, and the entity that provided the money for the car has a lien on the car. That entity could repossess the car if the individual does not repay his or her debt.
“You can take some of these delinquent tax bills… and you can turn that debt into a financial instrument and you can sell it,” Wasserman said.
Athens County has contracted with a Texas-based company called Tax Ease, which buys delinquent tax certificates from the county “once or twice a year,” Wasserman said. A tax certificate is just a piece of paper with all of the information about a specific property, including the amount of delinquent taxes owed.
“Once we sell them this piece of paper, which we sell them for the full value of what the taxpayer owes plus a fee that Tax Ease pays to us. Now, they (taxpayers) owe Tax Ease.”
Under Ohio law, the county automatically has a lien on any property on which delinquent taxes are owed. Tax Ease, once it purchases the tax debt, also acquires the county’s lien on that debt., which is the “first position” lien, meaning a highly prioritized debt.
“Our lien is better than everybody else’s because we’re the government,” Wasserman said. “So, even if your mortgage company has a beef with you because you haven’t paid your mortgage, we come first.... When these people buy the tax lien from us, they buy that number-one position and they’re actually (ahead) of the bank.”
Tax Ease, under state law, must wait one year before foreclosing on a property, whereas the county could foreclosure immediately by the time a property’s tax certificate is eligible to be sold. “So it actually helps the taxpayer in that one way, but it does add a lot of fees; it’s expensive,” Wasserman said.
Those who set up payment plans with the county, or pay their debts in full, don’t have to worry. “The only people that this happens to are the people who won’t come and deal with us,” he said.
Before a delinquent tax certificate is sold, Wasserman said, the property owner would have received a minimum of three tax bills in a single year, the normal two that everyone gets plus a special one in November just for those with delinquent taxes; and they would have received at least one certified letter from the county indicating that the lien could be sold to a third party and encouraging the property owner to set up a payment plan.
Tax Ease won’t buy every lien, Wasserman said. “Tax Ease only takes the liens that they think are a good risk… They cherrypick the properties that they really want, but at the beginning of the process, we don’t know which ones they’re going to want and which ones they don’t,” he said.
In the email sent Friday, Wasserman said that the county can choose to sell liens to other entities if Tax Ease chooses not to buy them. Since it’s uncertain by the November deadline which liens will be purchased and which ones will not be, every property owner who is eligible to have his or her lien sold gets a letter, Wasserman explained.
“We sent out 1,700 letters in November for parcels that were eligible to have their liens sold,” he said. “The vast majority of those people did make contact with us, and we started hundreds of new payment plans for people... since basically the week after Thanksgiving.”
While the sale of tax liens may not be a great arrangement for the property owners whose liens are sold, this does appear to be a good deal for the county (and for Tax Ease).
“When we sell a tax lien, we no longer have to collect that debt… We’ve outsourced the time and expense necessary to collect that lien,” Wasserman said.
In his email, Wasserman said the county sold 173 lien certificates in December, “for a grand total of $336,109.09 in delinquent tax revenue.” That revenue is significant, because it has quite a few uses, including a large percentage that goes directly to public school districts in the county.
“I’ve got schools that need the money; I’ve got townships that need the money; I’ve got villages that need the money,” Wasserman said. “…The schools and the other agencies only get the money that’s collected. It’s not as if there’s somebody who’s going to make up that money if somebody doesn’t pay… So it’s just critically important that we get every penny that we’re able to get.”
Wasserman said his office collected roughly $3.4 million in delinquent taxes during the 2017-2018 tax period, and that the total number of taxes owed to the county decreased by about $400,000 from 2016 to 2017 due to collection efforts.