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Teton County forecloses on tax delinquencies

Teton County Forecloses on Delinquent Tax Property

For the first time in 22 years, the Board of County Commissioners foreclosed on a delinquent tax property.  As a part of the fallout from the recent boom-bust in speculative development in our county, the collection of back taxes is a growing problem.  As of January 2011, there were 98 parcels owing roughly $65,000 (plus 12% penalty interest) delinquent in taxes all the way back to 2007.  All but one of these parcels has now come current on their 2007 taxes. There is a caveat here: Most of these property owners only paid off their 2007 back taxes; they are still delinquent on their 2008-2010 taxes.

The trend is that the number of tax delinquencies is growing. As of June 8, 2011, the Treasurer reports that there are 881 parcels currently owing $573,475 in 2008 back taxes (plus 12% penalty interest accruing since 2008). This is more than double the number of delinquent parcels at this time last year. Last July, we reported that there were 438 parcels owing 2007 back taxes totaling $249,000. Under state law, these 2008 delinquencies will become due for mandatory tax foreclosure on December 20, 2011 and the process will begin all over again. Most of these delinquent owners will likely pay off at least one year of their back taxes, but with numbers this high, it remains to be seen what properties will become due for foreclosure this December. 

The parcel that that was foreclosed on this week was a roughly 17-acre parcel of Teton Creek that is platted as open space within Creekside Meadows subdivision. The parcel was owned by Bruce Simon, who owed roughly $10,000 in back taxes on the property.

This begs the question: How high are our taxes in Teton County? As it turns out, we have some of the lowest taxes in the state. According to a 2010 report by the Idaho Tax Commission, out of the 200 incorporated cities in Idaho, here is how our 3 cities rank in terms of 2010 county and city taxes combined:

  • Tetonia – 182 out of 200 Idaho cities (A Tetonia house assessed at $200,000 pays $754 in city and county taxes)
  • Driggs – 180 out of 200 Idaho cities (A $200,000 Driggs house pays $796 in city and county taxes)
  • Victor – 176 our of 200 Idaho cities (A $200,00 Victor house pays $827 in city and county taxes)

Here’s another way to look at it:  A house assessed at $200,000 in Driggs would have paid about $315 in 2010 in city property taxes. By comparison, that same house would have paid:
•    $457 in Sugar City,  
•    $1,947 in Pocatello,  
•    $1,776 in Idaho Falls,  
•    $1,428 in St. Anthony,  
•    $744 in Rexburg,
•    $776 in Preston (home of Napoleon Dynamite!)

•    $2,772 in Bancroft (the city with the highest taxes in Idaho)

•    $30 in Island Park (the city with the lowest taxes in Idaho)

Out of the 44 counties in Idaho, Teton County ranks 40th on the property tax scale.  With regards to property outside the city limits, a house assessed at $200,000 in Teton County would have paid $481 in 2010 county property taxes. To compare, that same house would have paid:
•    $893 in Madison County,
•    $793 in Bonneville County,
•    $803 in Jefferson County, and
•    $581 in Fremont County

With taxes this low, our County Commissioners must stretch every dollar to provide public services such as law enforcement and road maintenance. As our recent cost of services report indicates, far-flung development is particularly expensive to service and creates a growing drain on our county’s budget. Property taxes in remote locations simply do not offset the cost to service these remote homes. If all the vacant lots in our county were to have homes built on them, it would result in a roughly 1.9M annual budget shortfall, and 15.5M shortfall in capital improvements. Thus, our overall level of public services would decline precipitously. Our low tax rates make it clear that we cannot afford our scattered patters of growth. So what happens next? Can we reshape our development patterns to more affordable growth scenarios?

Click here to learn more about the Teton County fiscal impact planning work and various cost of services studies VARD has done (with the generous assistance of the Sonoran Institute).


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