Officials unsure if economy is to blame

Nov. 26, 2008

By Greg Elias

Observer staff

Late property tax payments jumped 27 percent in October, prompting town officials to watch warily for signs more residents are struggling amid the economic downturn.

Town Manager Rick McGuire reported to the Selectboard last week the sharp increase in unpaid property taxes. Past due payments totaled $267,384 in October, up by $56,252 from the same month in 2007. It is the highest amount in arrears for the month in the past six years.

McGuire, who oversees delinquent tax collections, emphasized that the past-due amount represents less than 1 percent of the roughly $31 million Williston property owners pay annually. He also noted that a change in the due date for payments may have skewed the numbers.

Still, the unpaid tally is something to watch carefully, McGuire said, especially with increasing awareness of how the darkening economic picture is affecting government revenue.

“Certainly, it is enough of a change to warrant continuing to closely look at it,” he said. “But we don’t have enough information to know if it’s a long-term trend.”

Property tax bills are sent out once a year. Residents pay in three installments, which are due in August, November and February. Typically, the total unpaid tax tally is highest immediately after the installment dates, town officials say. That number usually drops over the following months, then rises again immediately after the next payment is due.

For example, in October 2007, there was a total of $211,132 in unpaid taxes. Immediately after the November installment was due, the town had roughly $572,000 in late taxes still due.

Assistant Town Clerk Kathy Smardon said people forgetting to pay their bills account for the majority of late tax payments. Most catch up within a month or two.

“A few, those who are truly delinquent, are much smaller,” she said.

The town considers taxpayers delinquent after they fail to make the February payment.

Late and delinquent taxpayers comprise only a tiny fraction of all property owners in Williston. Smardon said at any given time there are roughly 100 people who are behind in their bills.

It is unclear if the economy is affecting tax collections. McGuire said it will take several months to determine if there is a trend.

Town Clerk Deb Beckett, who is also town treasurer, said she occasionally hears from people who say they can’t pay because they have lost their job, but she’s not aware of any increase in late payments because of the economy.

The latest tax payment was due Nov. 17. Smardon said more taxpayers were telling her the bill was a burden.

“More people were saying it’s hard to pay the bill,” she said. “But that doesn’t necessarily mean they are not paying. It just means they are struggling.”

Property owners who are late with their August and November installments pay 1 percent a month interest on the amount they owe for the first three months, 1.5 percent afterwards. Those delinquent after the February installment also pay a penalty of 1 percent.

Eventually, the town can take over and sell a property to recoup delinquent taxes. But tax sales are rare.

McGuire said there has been no tax sale involving a residence since he has been town manager. He works with property owners to set up payments plans and make other arrangements to avoid such a drastic measure.

McGuire said he will continue to monitor the tax payment situation.

“It’s just a heightened financial awareness for town government,” he said. “It bears closely watching.”