Nearly $36 million in taxes dating back to tax year 2000 — mostly for real estate and personal property — remain outstanding to the Sedgwick County Treasurer’s Office, records obtained by The Eagle show.
Although that figure may seem staggering — and at least one county commissioner thinks it is — it’s less than 1 percent of what the office billed from tax year 2000 to tax year 2011.
The treasurer’s office billed just more than $3.8 billion in taxes during that period, of which about $36 million remains outstanding. Treasurer Linda Kizzire said that number will decrease as her office receives proceeds from three tax foreclosure sales held this summer.
Commissioner Jim Skelton pressed recently for the county to go after delinquent taxpayers. In an off-agenda item at a meeting last month, he said he was sick of seeing so many of the same names on the county’s list of delinquent real estate taxpayers year after year.
“Certainly we need to have the ability to hire collection agencies,” Skelton said Friday. “That’s one option. Also credit reporting is an option.”
Skelton said he wants to “have a discussion” with staff, including Kizzire and those in her office, about what recourse is available.
Skelton called delinquent taxes the county’s biggest “subsidy” last month.
Rules for collecting
Kizzire and her staff collect taxes on behalf of the county, cities, townships, school districts and other taxing jurisdictions.
When people don’t pay, she is limited by state law in what she can do to collect.
Vacant lots with delinquent general taxes and special assessments can be foreclosed on after two years from the date they are bid off by the treasurer, Kizzire said. She gave this example:
General taxes and special assessments for 2009 were levied in November that year. If unpaid in September 2010, the county could bid the delinquent taxes and special assessments. The properties were then eligible for foreclosure in September of this year, and the sale will occur next year.
Other real estate parcels are eligible for tax foreclosure sale after taxes remain unpaid for 31/2 years.
Kizzire is required by law to publish a list of delinquent taxes for three consecutive weeks in The Eagle, the county’s official newspaper. Before publication, delinquent taxpayers can avoid a tax foreclosure sale by paying one year of their back taxes. And that’s what many do. They avoid a tax foreclosure sale by paying one year’s taxes even if other years’ taxes are due.
At the October meeting, Skelton said such people are “playing a game.”
“Shame on them,” he said.
After the list is published, people must pay all their back taxes to avoid a tax foreclosure sale.
Kizzire said in an e-mail that she wishes the county could do more to collect back taxes.
“But we need to keep this in perspective considering the amount of delinquent taxes owed, which has been 1 percent or less of the total amount of taxes billed for the past several years,” she said. “We have been impacted by the economic downturn with layoffs and the tough business climate.”
Be tough or lenient?
John Todd, a Wichita resident who regularly attends commission meetings and is active in the Pachyderm Club and other Republican groups, said Skelton was “making political hay out of a non-issue.”
He thinks taxpayers should have some time to make good. He said he worries especially about elderly taxpayers who own their homes but can’t afford their taxes. He said he would hate to see them turned over to collection agencies for back taxes.
“I’m sorry, I just don’t go along with that,” he said.
But Skelton notes that when people don’t pay their bills, most businesses go after their customers.
Kizzire said taxpayers can set up a payment plan.
“I would be open to legislative changes for the collection of delinquent taxes and special assessments, but I feel we need to assist the taxpayer in meeting their obligations by allowing them to use a payment plan.,” she said in an email. “Sometimes it’s a budget consideration in the individual household. Sometimes it’s a more serious personal financial problem. We encourage people to pay on time and when they can’t, we try to work with them to get the issue resolved.”
In spring of last year, Kizzire added a red “Delinquent” stamp to unpaid tax bills as a way to bring more attention to them.
Most of the back taxes from tax years 2000 to 2006 are from personal property, which includes mobile homes, boats and jet skis, among other belongings.
Kizzire’s office is not allowed to have tax foreclosure sales on personal property. People with unpaid personal property taxes, however, are not allowed to tag their vehicles.
Jo Hillman, chief deputy treasurer, said some people who owe back taxes for personal property likely don’t even own the property anymore. They might have sold it or otherwise gotten rid of it. People need to call the treasurer’s office when they are billed for personal property they no longer own, Hillman said.
The nearly $36 million also includes special assessments.
In the past few years, because of the economy, the treasurer’s office has seen more vacant lots with special assessments in delinquent status.
Karen Bailey, chief deputy clerk for the county, explained in an e-mail that longer term special assessments begin with the tax district where the improvements are to be made.
“Basically, specials are simply a long-term loan to pay for major infrastructure improvements made to vacant land. These new streets and drainage detention ponds and water and sewer lines enable major developments to occur within those communities, which in turn, increases their tax base and population. Without this method of specials, the cost for the improvements would be charged by the developers in the initial cost of the lot.”
Once improvements are completed, Bailey said, permanent financing is usually made with general obligation bonds, “backed by the full faith and credit of the community selling the bonds.”
“Most cities have a debt policy where they govern the amount of outstanding debt they will incur on behalf of a developer. They establish a threshold of the percentage of ‘down payment’ required from the developer for the city to approve the improvements and back the development,” Bailey said in the e-mail.
Developers secure a letter of credit or surety bond held in favor of the city or county to guarantee timely payment of taxes when due, Bailey explained.
“If their projects become delinquent, the governing body can ‘draw down’ from the letter of credit to collect the delinquent amount of special assessments,” she said.
Before the economy weakened, most delinquent real property taxes were from developed lots, deputy treasurer Hillman said. Starting in about 2007, more vacant lots landed on the delinquent list.
“Developers essentially walked away,” Hillman said.
Real estate taxes
Real estate taxes typically are paid in two installments.
If first-half taxes are paid by Dec. 20, second-half taxes are due May 10.
The taxes for many residents are paid by their mortgage companies.
The treasurer’s office offers a pre-payment plan for people who own their homes outright.
They can set up monthly payments so their taxes are spread over the year.
“We have over 2,000 people on that plan,” Kizzire said in an interview. “It seems to work really well for people on fixed incomes who own their homes.”