PITTSFIELD -- The Bianchi administration is considering a property tax amnesty program and more aggressive follow-up on tax title cases in a bid to reduce the rising total amount of overdue taxes.
City Finance Director and Treasurer Susan Carmel said the total outstanding receivable amount now stands at about $7 million and "has been going up year to year."
Carmel said $4.8 million is owed on properties in the tax title phase, which means the bills weren't paid during the fiscal year in which they were sent, and the city has subsequently placed a lien on the property for the amount owed. Some properties have taxes owed for more than one fiscal year.
Another $2.2 million was not paid during fiscal year 2013, which ended on June 30. If payment is not made or a payment plan worked out, some of those properties could land in the tax title phase as well. Liens typically are not placed until the end of the following fiscal year while the tax collector's office continues to send notices to the property owners.
Carmel and Tax Collector Marilyn Sheehan said there are a number of factors that have contributed to the increase in the total, but fallout from the financial sector meltdown of 2008-09 and the recession that followed certainly played a role.
Providing some perspective, Sheehan said nearly 17,000 tax bills are sent out by the city, and money is owed on 600 to 700 by the end of the fiscal year. About 90 percent of the properties are single homes, but there also are rental and business properties and undeveloped land.
Until the end of the fiscal year, bills are considered overdue, and the tax collector notifies property owners of their obligations. As of June 30 each year, the city could immediately place a lien on the property and begin the tax title process which could eventually end in taking the property. However, Sheehan said the city typically sends additional notices to those who owe for the past fiscal year and a final notice in January.
The liens normally are placed in June on properties on which taxes are still owed from the previous fiscal year. By that time, Sheehan said the number of bills overdue for that period has been significantly reduced.
Regardless of when a late payment is made, there is a 14 percent penalty, assessed annually. Once a lien is placed on a deed and the tax title process is underway, the interest fee goes up to 16 percent of the amount owed. The property owner also could be charged for court fees.
For fiscal year 2012, ending June 30, 2012, Sheehan said there were more than 600 overdue bills initially but the number added to those in the tax title phase -- which could ultimately end with the city seizing the property through Massachusetts Land Court -- was cut down to 144.
For fiscal year 2013, which ended on June 30, there were about 700 properties with outstanding bills. "I hope to whittle it down to under 100," she said.
The city is now is almost halfway through fiscal year 2014. Final late notices will be sent in January for fiscal 2013, and the liens will be recorded next June. Once the liens are filed, Sheehan said the tax title process is handled by the treasurer's office and the city solicitor.
Bianchi said the administration "is contemplating another amnesty program. We had one several years ago and it was pretty successful."
That would involve "some accommodation" for taxpayers "who come forward and pay their [back] taxes," the mayor said. It might entail a reduction of interest on amounts owed or other inducements to spur resolution of overdue bills.
The details of the amnesty plan are being considered, he said, and he intends to submit a proposal to the City Council.
Meanwhile, Bianchi said the treasurer and City Solicitor Kathleen Degnan "will pretty aggressively pursue" tax title cases, seeking to resolve as many as possible. "We will evaluate each and every one of them," he said. "We have to know the status of each and what we have to do."
In some cases, Bianchi said, filing paperwork with the court could be all that is required.
The mayor said that most situations resulting in long overdue bills are unique. Sometimes, he said, an elderly couple will have died and the title is unclear or the heirs are unable or unwilling to take on a large tax bill. Or someone has lost their job and can't keep up with bills.
The annual list of those going into the tax title process that was posted in June shows a number with partial fiscal year payments outstanding, many with apparent total tax bills outstanding and some with taxes owed for two or three years.
Carmel said it is important for taxpayers to understand the process of moving toward tax title that commences at the end of each fiscal year on June 30, and what the options are for working out a payment plan to pare down the bill over time.
More information on the tax title process is available on the city's website at http:// www.cityofpittsfield.org/city_hall/tax_title.php
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