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Towns step up efforts to chase property tax delinquents

Posted January 14, 2010 06:59 PM

Tough times call for tough measures; so say officials in several communities south of Boston that have stepped up efforts to chase down property tax delinquents, hoping to recoup millions in long-overdue debts.

Bridgewater selectmen recently posted on the town’s website the names of local tax scofflaws whose bills predated 2006. The effort is aimed at recovering $1.6 million owed.

Nearby in Holbrook, the interim treasurer-collector says he may auction municipal tax debts to third-party debt collectors, who would then take over the task of pursuing the delinquents. Such a move would recover up front at least some of the $4 million in real estate taxes the town is owed, he said.

And in Milton, the treasurer-collector recently paid to have a local newspaper publish the names of the seven top tax delinquents in town, a move aimed at shaming the scofflaws and warning others that they, too, may face public embarrassment if they don’t pay up. Milton officials said the measure has quickly brought in close to $1 million in tax debts.


The need for ready cash is great in many municipalities, including Bridgewater, where the town’s accounts are running in the red despite massive budget cuts in recent years.

“How can we ask for more money from the prison or college in town, if our own taxpayers aren’t paying their fair share?’’ said selectmen chairman Christopher Flynn. “We’re owed $1.6 million. That’s more than we asked for in an override.’’

The town’s most recent tax-limit override request, for $1.36 million in June 2008, went down in defeat. That outcome resulted in drastic cuts to budgets; the local senior center, for example, received just $35,000 for the current year.

“At least a couple people owe in excess of what we fund our senior center at for the year,’’ Flynn said. “That bugs me. I had no reservations at all about doing what we did.’’

Bridgewater lacks the money to fol low standard protocol for back tax collection, which calls for publishing the delinquent tax list in the newspaper and placing liens for the unpaid amounts on deeds in the Plymouth County Registry. So local officials got creative and slapped every scofflaw on the town website, figuring the word would get out quickly, at no additional cost to taxpayers.

Flynn said the feedback he’s received about the move has been mostly positive. Most people believe everybody should be paying their fair share to the community, he said.

In Holbrook, interim treasurer-collector Robert Haley said the town is owed about $4 million in delinquent taxes. “Five property owners owe over $100,000, and 25 owe between $10,000 and $100,000,’’ Haley said. “Some of these people haven’t paid taxes for years.’’

Standard efforts for back tax collection are underway, with delinquents to receive one more warning letter next month. “I’ll try to collect as much as I can without putting on a lien,’’ Haley said. Property owners who set up a payment plan can avoid a lien on the deed, he said.

Then the town could get even more aggressive, selling the debts to professional collectors.

From there, the situation for the scofflaw could get ugly really quickly, with high interest rates on the debt and a bad credit rating likely to kick in if the property owner does not pay up.

“We can sell the tax to outside investors,’’ Haley said last week. “I’m just looking to get the town the money up front, and I think about $3 million is collectible. Most people don’t want to deal with outside investors.’’

Haley said the measure would be even more effective with other communities onboard, as more tax titles would attract more investors looking to bid on the amounts owed.

“We could do a joint assignment of the debt that would draw even more investors,’’ he said. “I think if you did this, most taxpayers would step up to the plate and pay.’’

Susan Kelley, president of the Massachusetts Collectors and Treasurers Association, said smaller communities tend to steer away from selling tax title debts to outsiders. Their collectors often know the tax delinquents and their reasons for non-payment.

Kelley is the treasurer for Lee, a tiny town in Berkshire County. “I reach out to our taxpayers and tell them the interest rate goes to 16 percent when a property goes into tax title,’’ Kelley said. “I tell them they would be better to take out an equity line from their banks.’’

Communities looking to get back real estate taxes can also approach a homeowner’s mortgage holder and inform them of the debt, she said. “The banks will usually pay the amount and bundle it into the mortgage.’’

Milton’s treasurer-collector, James McAuliffe, said he has found that applying pressure to the biggest tax offenders works well.

“I published the names in the newspaper of the seven property owners with the largest amounts owed,’’ he said. “We collected the amounts from four, and the other three set up payment plans.’’ The effort lowered the amount outstanding in back taxes from $2.5 million down to $1.6 million, McAuliffe said.

Milton still has 54 properties in tax title. “A lot of those are smaller amounts of properties owned by people who passed away or are in nursing homes,’’ he said.

In Bridgewater, acting tax collector Nancy Wolfson said she isn’t certain how effective the publication of scofflaws’ names on the town’s website will be. At the end of last week, she had yet to collect a dime, she said.

“Some of those accounts are old, and the people don’t live on those properties anymore,’’ Wolfson said. “One even dates back to the 1800s.’’

Christine Legere can be reached at christinelegere@yahoo.com.  

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