Harnett leads area in property tax collection

Jul. 08, 2014 @ 04:58 AM

Counties rely on property taxes to fund needs like education, public safety and emergency medical services. But collecting 100 percent of property tax revenue is nearly impossible.

However, Central Carolina counties are coming closer to that mark. 

Actual amounts collected from Lee and its neighboring counties vary, and when residents fail to pay, government officials rely on a number of tools to try to collect what is owed.

At 98.85 percent, Harnett County collected more property tax revenue than all but 11 of North Carolina's 100 counties during the fiscal year 2012-2013.

“I feel like our staff does a really good job,” said Harnett County Tax Administrator Keith Faulkner in a statement. “We are constantly striving to improve, not only in collection percentage, but in the whole operation of our office. We’re always working on ways to better serve the public.”

During the same fiscal year, Lee County collected 97.02 percent of property taxes owed, and Chatham County collected 96.71 percent.

Property tax revenues are divided between real and personal property taxes and registered motor vehicle taxes. Faulkner said motor vehicle taxes tend to be more difficult to collect.

"With motor vehicles, you have people who move out of the area," he said. "People may get their tags renewed and then move out of state."

A change to the collection process for motor vehicle taxes that took effect in 2013 requires residents to pay the tax on their motor vehicles when they renew their registration, as opposed to previous years in which the two were paid separately. Chatham County Tax Administrator Frances Wilson said the new system has increased motor vehicle taxes collected.

"Now, people know they'll have to pay last year's taxes in order to get their tags renewed," Wilson said. "It kind of caught up with all those people. Now they have to pay up front. That helped increase property tax percentage this year."

In the fiscal year 2012-2013, Chatham County collected 92.13 percent of motor vehicle taxes. In 2013-2014, collections went up to 95.36 percent. Moving forward under the new system, motor vehicle taxes will be handled by the N.C. Department of Motor Vehicles as opposed to county tax departments.

The other category of taxable property, real and personal property, includes real estate and possessions. Gary Briggs, Moore County Tax Department's division leader for real property, said the county collected 99.7 percent of real and personal taxes during the fiscal year 2013-2014, the highest collection percentage the county has seen.

"The staff size [of the tax department] and the nature of the community you're in have a lot to do with collection," Briggs said. "Every county has its own set of economic challenges its people are facing. We've been fortunate to maintain the collection rate that we have, especially given the current economic conditions."

When it comes to dealing with residents who fail to pay, Faulkner said three basic tools are available to collectors.

"There are several different avenues that you can use," Faulkner said. "Basically, you can use wage garnishments, bank attachments and foreclosures. We do actually go through the foreclosure process if we have to, but we try to go through other things first."

Wage garnishments deduct money from an employee's salary until the taxes have been paid off, and are usually the first method used to attempt to collect overdue payments.

"Then you go to bank attachments," Briggs said. "Foreclosures are a means of last resort."

Briggs said Moore County initiates foreclosure proceedings on roughly 30 properties a year, and of those, between 15 and 17 are actually sold. He said people are able to pay off their taxes up to the day of the foreclosure auction to put a freeze on the proceedings.

According to Lee County Manager John Crumpton, the county completed foreclosure proceedings on 26 properties in the fiscal year ending in 2013. The county bought 13 of the properties, and 13 were sold to other buyers. In the fiscal year ending in 2014, the county bought 14 properties and sold three to other buyers.

Chatham County filed for foreclosure on 130 properties during the fiscal year 2013-2014, according to Wilson.

"During the last fiscal year," she said, "the total dollars due that was assigned to the attorney was $502,790.26, of which $344,493.45 was paid. The majority of the properties are paid in full before the sale date. I wish we didn't have to take the extreme measures to collect delinquent taxes, but sometimes it's the only way that we can."