Tax Office Reports Collections Are Up

By Jan Howard

Newtown’s tax office has reported its best collection rate in years for the fiscal year that ended June 30, 2003.

Tax Collector Carol Mahoney and Finance Director Ben Spragg announced this week the tax office staff has collected 98.4 percent of current taxes. This does not include back taxes owed to the town that have been paid. If these were to be added, the tax collection rate would be 100 percent.

“The state only looks at current year taxes,” Ms Mahoney said, adding that she does not remember a tax collection rate this high in the 17 years she has been with the tax office.

Mr Spragg noted that it is at least the best tax collection rate over the past ten years. He said that current year collections give a sense of what the local economy is.

Ms Mahoney attributes the success of the tax collection program to the hard work of the tax office staff. “Things are going well,” she said. “We continually have to work at it.”

Past due notices are sent out immediately in August and February, following the deadline for payment of taxes, and several times a year to those taxpayers who have fallen into arrears. In addition, Ms Mahoney said, changes of ownership of real estate are kept current so tax notices can be sent out as quickly as possible to new owners.

Staff members also call people regarding overdue real estate and personal property bills to set up payment plans. They also follow up about past due motor vehicle taxes.

In some cases, the town might inform taxpayers that the town would place a lien on a property for back taxes, which often leads to people paying any back taxes plus current taxes.

Ms Mahoney noted that people who owe back taxes are asked to set up a payment plan or to resolve the debt. The property might have a lien placed against it, though Mr Spragg said less than one-half percent of the adjusted tax collection involve properties with liens.

In the event a lien is placed on a property by the tax office, the property cannot be transferred until the lien is settled. When a property is paid, the tax office is first on the list to receive money owed to the town.

“They have to pay their taxes first,” Mr Spragg said, before any other debts, such as mortgage, are paid. If the town decides to sell the lien, the company to which it is sold has the same rights as the tax collector.

If liens are sold, “We get paid 100 cents on each dollar for the liens,” Ms Mahoney said.

Mr Spragg said, with few exceptions, the company that purchases the liens has not foreclosed on properties.

The problem for this year is motor vehicle taxes that are overdue. Ms Mahoney and Mr Spragg noted that many people hold off on paying their motor vehicles taxes until their registration is due. In the past, the Department of Motor Vehicles would not renew a registration on a vehicle for which unpaid taxes were due. This would bring people into the tax office so they could reregister their vehicles.

However, Ms Mahoney and Mr Spragg said, the state decided to no longer file notices on motor vehicle taxes that are overdue. In order to do so, the state is requiring the towns to pay a fee for that notification.

In the future, the state would bill the towns a flat fee for the notification. Because the town was not notified of the fee this year in time to have money appropriated in the budget, however, Mr Spragg said the town would probably miss some tax monies it would have ordinarily collected.

He said the process was delayed because it takes time for a nonbudgeted funding transfer to receive approval from the Board of Selectmen, Board of Finance, and Legislative Council.