Council Approves The Sale Of Tax Liens

By Steve Bigham

Newtown is still awaiting payment of $878,000 in unpaid taxes from last year, which it does not expect to ever collect. Rather than writing off the amount as lost revenue, town officials plan to sell the liens to a collection agency.

On Monday, the Legislative Council voted in favor of selling those liens to the American Tax Funding company.

“The idea behind this is we get money instead of having it on the books,” explained Council Chairman Pierre Rochman.

This is the third such tax lien sale done by the town since the state authorized the practice a few years ago.

The town is likely to receive 100 percent of those liens. The only downside to selling the tax liens is that the town loses out on the 18 percent interest charged the tardy taxpayers. However, the council two years ago agreed that collection of most of the unpaid revenue is still better than collecting little or none at all.

Approval at a town meeting is still required before the liens can be sold. If approved, the money will be deposited in this year’s capital and non-recurring expenditures account for future use.

John Kortze, chairman of the council’s finance subcommittee, has stated that 100 percent collection of taxes is a “big capital shot in the arm for us.”

“Instead of letting them linger and not collecting them, why not realize it, then use the money to offset future tax increases,” he said.

The town usually collects about 98 percent of its taxes prior to any lien sales.

Those delinquent taxpayers will be given one last opportunity to pay up before the issue is passed on to the collection agency. Finance Director Ben Spragg said many people tend to come forward to pay, preferring not to deal with an outside group.