Jan. 5 may have been the last day to legally pay year 2000 property taxes in North Carolina, but tax collectors will spend the next year using various methods to collect hundreds of thousands in past due money.

That’s money that can keep the tax rate down for those who do pay on time.

Take Haywood County, for example. For the fiscal year that ended June 30, 2000, about $950,662 was uncollected when the fiscal year ended. One cent on the 61 cents per $100 valuation brings in $190,000.

Tax Collector David Francis, like his counterparts throughout the state, has used a variety of methods -- late notice letters, bank attachments, foreclosures, and garnishments, for example -- to collect that money.

And the office is doing its job well, according to state statistics. It’s collection rate is nearly 95 percent, which is a high percentage for a county its size. In fact, for three straight years the collection rate in Haywood County has risen. That means the past due amount has dropped by nearly $200,000 from 1998.

“The people in this office worked awful hard last year to get to where we are,” Francis said.

Richard Lightner is the tax supervisor in Macon County and also the president of the state association of tax supervisors. The collection rate in his county is at 96 percent, which means about $515,000 was uncollected at the end of the last fiscal year.

“I guess the holy grail of collection would be to get it to 98 or 99 percent,” Lightner said. He doesn’t know if that kind of collection rate is possible, but he has some ideas about how to increase collection rates.

One is to formalize and get county commissioners to adopt a strict set of procedures for how the tax office should address late taxes.

“In big counties it is a daily business, and they are set up to do garnishments, foreclosures, and take other measures. We’ve talked about it, but we use fee-based attorneys which means we use out-of-office methods,” Lightner said.

Ideally, Macon County would have a set of guidelines that laid out in detail not only when taxes are due, but exactly when first notices would go out and when garnishment of wages and others collection procedures would kick in.

“In small counties, people pick up the phone and call their commissioners to complain. If we have procedures in place, the board can simply say we are following procedure,” Lightner said.

Even though those collection procedures may not be set in stone, tax collection officers are taking other measures to increase efficiency. Francis says he has updated accounting practices, upgraded technology, let people pay over the phone with credit cards, set up monthly drafts and taken other steps to make the business of tax collecting more efficient and customer friendly. He hopes before long to allow taxpayers to access their tax bills through the Internet.

Those who work in the county tax collection offices must walk a fine line between trying to do their job effectively and coming off as the bad guys who take money from poor, hard-working citizens.

“Yeah, sure, we get a lot of the anger from people who think the tax rate is too high or their property valuation is too high,” Francis said.

“We are willing to work with people to get these things worked out, but taxes are one of those necessary evils,” he said.

John Cleaveland is a realtor, a former mayor of Highlands and the leader of an organization known as the Macon County Taxpayers Association that is known for calling for lower tax rates. He says that while he works in the political arena to keep taxes down, it is a civic duty to pay up when the time comes.

“Our thrust is to keep taxes down, to question what they are used for and try to affect change through the county commissioners,” Cleaveland said. “But we are not in favor of not paying taxes. We don’t advocate breaking the law. You pay what you’re supposed to.”

He does wish more people would attend commission meetings and question the use of taxpayer money.
“More people should go to those board meetings, where you can really make a difference,” Cleaveland said.

Beverly Buchanan is the tax collector in Jackson County and has worked in that office for 19 years. She says the stereotype of who pays and who doesn’t is typically misconstrued.

“People say ‘you would take a piece of property through foreclosure from some old couple on a fixed income.’ The truth is that we hardly ever do that because those kind of people pay their taxes,” Buchanan said.

In Macon County, 60 percent of the 38,000 property tax bills go out of county. That sets up two scenarios, according to Lightner: most of the taxpayers are relatively wealthy and can afford to pay; for those who don’t pay, however, implementing collection procedures out of state can be cumbersome and expensive.

Lightner said another effective way to collect taxes when real estate markets are active is to work extra hard to get to new owners. Macon County makes a point to try and track down the owners when real estate changes hands.

Almost all tax offices say their offices are understaffed. And when it comes to collecting motor vehicle taxes, the problems are compounded.

Motor vehicle tax collections are handled through county tax offices but come due according to the month in which the car was purchased. In Haywood County for example, there are about 65,000 motor vehicles and 49,000 real and property tax parcels. Those 65,000 vehicles, however, account for only $2.27 million of the $19.9 million levy. The vehicles also accounted for $400,000 of the $950,000 amount that was past due at the end of the fiscal year.

In fact, so many people are late paying their automobile taxes that they almost always bring down the county collection rate. In Haywood County, only 82.3 percent of motor vehicles were paid on time last year.

“There has got to be a more efficient way to do it. It seems there are some simple solutions,” Francis said.

He suggests linking yearly automobile registration and tax payments. Right now, the Division of Motor Vehicle sends information about automobiles to a separate company when people renew their registration. Then the information on the vehicle’s value is sent to the tax office, so there is a lag of up to four months.

That provides little incentive for taxpayers to pay on time and creates mountains of paperwork for tax offices for only a small percentage of their collections.

Lightner agrees that the current method is inefficient, and he says several states, including South Carolina, pay their vehicle taxes at the DMV when they renew their tags.

“With assessing, billing and collecting, sure it takes a lot of our resources,” he said.

But Lightner also said that the $900,000 Macon County collects annually in vehicle taxes helps pay for a lot of needs.

“If that money was gone, it would have to be passed on to property owners,” he said.

One of the best ways to increase collections for smaller counties, Lightner thinks, would be to have their own attorneys in house. Sending garnishments, attachments and other collection procedures to the county attorneys, who work on a percentage of collection, makes it expensive.

“Until small counties get attorneys who work full time, their collection rates probably won’t get much higher,” Lightner said.

 

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