Date: Fri 13-Mar-1998

Publication: Bee

Author: STEVEB

Quick Words:

council-tax-liens

Full Text:

Town Considers Sellings Its Tax Liens

BY STEVE BIGHAM

Newtown is still awaiting payment of $1.3 million in unpaid taxes from last

year, which it doesn't expect to ever collect. Rather than kissing that money

goodbye, town officials plan to sell the liens to a collection agency.

It is a novel idea and one Newtown has never done before, according to Finance

Director Ben Spragg. The council's finance committee is looking into this

after it was suggested by Legislative Council member Donald Studley.

State legislators only recently passed a law permitting the sale of tax liens

and several area towns have taken up the practice.

The town is likely to receive 100 percent of those liens, according to Mr

Spragg. The downside to selling the tax liens is that the town loses out on

the 18 percent interest. However, the council's finance committee believes

collecting most of the unpaid revenue is still better than collecting little

or none at all.

If the sale of the tax liens is approved, the Legislative Council would not

use the money to offset taxes. Instead, it has plans to deposit the money in

this year's capital and non-recurring expenditures account, then use it to

offset the anticipated $1.3 million revenue shortfall in the 1999-2000 budget.

"The only reason we're putting the money from the sale of the tax liens in

there now is so we can realize that money next year. If we wait, it will be

considered surplus and we won't realize that $1.3 million until the budget

year 2000-2001," explained John Kortze, chairman of the finance committee.

Because of the quality of the town and real estate in Newtown, Mr Kortze said

100 percent collection is the goal.

"That would be a big capital shot in the arm for us. Instead of letting them

linger and not collecting them, why not realize it, then use the money to

offset future tax increases," he said.

Last year, the town collected 98 percent of its taxes.