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438 parcels are 3-years delinquent in backtaxes

438 parcels owe 3-years of back taxes.

The BOCC requested Treasurer Bonnie Hatch to report on delinquent taxes owed on properties, because the county has not foreclosed on a tax deed in 27 years. Hatch reported that there are currently 438 parcels that are 3-years delinquent in taxes, owing $249,000 that has been accruing at 12% interest since 2007. In addition, each delinquent tax assessment also includes a 2% penalty fee. Commissioner Rinaldi inquired as to how many parcels were more than 3 years in arrears; Hatch responded that there was one parcel delinquent since 2006. She has been trying to locate the owner. Overall, the county has received 87% of all the 2009 taxes that have been assessed. Hatch reported that she is sending out regular notices of payment due in July and August. As you may recall from the previous email alert, Title 63 of the Idaho Code mandates that the county foreclose on properties that are 3 years in arrears.
 
Is this a regular occurrence?
County Attorney Kathy Spitzer inquired as to how many parcels are continuously 3-years delinquent and only pay 1 year at a time. Hatch was unsure, but the penalties of 12% annual interest and an additional 2% penalty fee are substantial. In addition, with the $230,000,000 in valley foreclosures since 2009, the banks have generally been good in paying off all the back taxes owed. That said, it was unclear how many parcels are just continuously 3 years behind in payment.
 
Will most of these taxes be paid?
Hatch opined that it was normal to see such a huge number of 3-year delinquencies and that everyone always seems to eventually pay up. That said, the future is definitely uncertain, but we do know that we are in the midst of as unprecedented boom/bust. Looking at this chart we see that 2007 was our highest year for speculative development, and the crash quickly followed. It is possible that just the contrary will be true; instead of eventually paying off their 3-year taxes like always, more and more developments will not be able to come current this time around. Development has always been a speculative business where taxes were often paid off with eventual lot sales. Now that sales have almost completely dried up in many zombie developments (especially the incomplete ones,) there is no revenue coming in to pay off the taxes. Some developments literally owe tens of thousands of dollars in 2007 taxes, and that does not include 2008 and 2009 taxes.
 
The Commissioners asked Hatch to regularly report back to them on her progress because they wanted to take prompt action on this issue. In listening to their discussion, the following details were unclear:

  • What is the amount of money owed for the parcel that is 4-years in arrears?
  • How many parcels are already 2 years in arrears (and thus likely to become due for foreclosure next year)?
  • How many of these properties are continuously 3-years delinquent and only pay up on one delinquency each year?
  • When is the firm deadline for the county to take action on these properties?
  • What is the process for confirming that full and complete payment has been received?

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