SHIRLEY -- Amid preliminary budget discussions at the Dec. 10 Finance Committee meeting, member Mike Swanton asked about the status of the town's efforts to collect back taxes.
Chairman Frank Kolarik has brought the issue up before.
Swanton recalled that selectmen appointed a committee and Town Meeting provided funding for the collection process the group recommended. The upshot was promised payback of $200 to $300,000 a year on a substantial tax backlog.
Becky Boucher, the town's principal assessor, answered Swanton's question. "I'd say nothing" is going on now, she said. "We got funding for the process," but it stalled.
To sketch the process, lists of tax-delinquent owners whose properties are subject to "tax taking" are posted by the town collector, as prescribed by law. If the owners don't pay, the next step is tax taking, with liens placed on the properties and recorded in the Registry of Deeds.
Tax title/foreclosure is the final step in the process. When all other avenues have been pursued and remedies exhausted, the list of remaining tax delinquents goes to the town treasurer so that paperwork can be filed in land court.
Apparently, that final step was never completed.
Asked about the matter later, Town Collector Holly Haase confirmed the process timeline and agreed that's where it stands now.
To be clear, though, she said that money recouped from old, overdue tax bills is not, by definition, new or added revenue for the town.
Town Accountant Bobbi Jo Colburn, in a later conversion, explained why.
"That money has already been spent," she said.
Collected or not, state law allows the town to include the total tax levy amount as revenue in the operating budget, back taxes and all, and the "deficit spending" piece adds to the town's structural deficit each year.
Monday night, Colburn told the Finance Committee that fiscal 2012 tax liens brought in a total of $62,949.62 for that year, plus $25,000 in fees and penalties. But she acknowledged that most of those reimbursements came from bank foreclosures in which the institutions that took over tax-delinquent properties paid the bills.
Boucher said the backlog balance totals $800,000, some of which may come back to the town if parcels are purchased and new owners pay off the back taxes.
The Finance Committee's dilemma then became where to go from here, whether to take action now or turn to the Board of Selectmen, which appointed the Tax Collection Committee and has jurisdiction over the treasurer's office.
Consensus was that it might be a good idea to ask the selectmen how they think the tax collection process is going and what's next, especially in light of the state's iffy budget scenario this year and its anticipated impact on the town budget.
Kolarik favored follow-up. "We were led down the garden path, told we'd get $200,000 a year in added revenue," from collected back taxes, he said.
"That was said," Boucher agreed. "The process was laid out but the ball was dropped," with nothing filed in land court, she said, adding that it can take up to five years to resolve a case once it is filed.
Boucher shared a scenario -- based on a true story -- to illustrate how the collection process can stall, indefinitely.
Say a property is in tax title but not necessarily in foreclosure and the house is occupied. It needs a new roof. Following procedure, the building inspector will not issue a building permit, since there are back taxes due. The selectmen, however, grant the permit, given that the situation seems to call for an immediate remedy. The problem is that nothing changes and come winter the next year, something else may come up, with similar outcome. In instances like that, the system -- despite checks and balances -- doesn't work. Why not? "Because somebody's not doing their job," Boucher posited.
The buck stops with the selectmen, Finance Committee members agreed. "It's reasonable to ask what the problem is so we can fix it and make headway," Swanton concluded.