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Wednesday, Jul. 02, 2008

Northern San Joaquin property owners delinquent on tax bills in record numbers

Record-high property tax delinquency rates were revealed Tuesday for the Northern San Joaquin Valley. Landowners haven't paid $120.4 million in taxes, primarily because so many homes have been lost to foreclosure.

More than $40.9 million in property taxes are past due in Stanislaus County. That's a staggering 8.5 percent of what was owed, and nearly one of every 13 landowners hasn't paid the 2007-08 tax bills.

"That's the highest delinquency rate we can find in recorded his-tory," said Gordon Ford, county treasurer-tax collector. He said the past-due percentage is more than triple what's typical for the county.

It's worse in Merced County: About 10 percent of property taxes haven't been paid. That's a $22.2 million shortfall, and about one in 10 landowners is delinquent.

San Joaquin County also set a delinquency record: About 7.7 percent of taxes haven't been paid, totaling $57.3 million. About one in 11 landowners is delinquent.

"This is not so bad," said Shabbir Khan, San Joaquin's treasurer-tax collector. Khan said he did a spot check on those who haven't paid, and he found most of the properties had been foreclosed on. "I see a lot of bank-owned homes out there," he said.

Apparently many banks don't bother to pay property taxes on time. Before they can resell those foreclosed homes, however, all tax bills must be paid, plus hefty penalties and interest charges.

"They cannot get free and clear title to the land without paying," Khan said.

Landowners who don't pay within five years will have their property seized by the government and sold at auction. In some special Mello-Roos property tax districts -- such as in Modesto's Village I or newer parts of Patterson -- those government seizures can happen more quickly.

"Someone is going to pay us," Ford said. In the meantime, Ford said, he is confident Stanislaus County will be able to pay its bills. "We have the cash flow we need. We're fine," he said.

Khan said San Joaquin has enough reserves to cover expenses. "We're not going to have a problem," he said.

Those who try to dodge the tax collector, however, may find it an expensive mistake. Late payers are charged a 10 percent penalty, plus every month an additional 1.5 percent in interest charges is added.

"In the long run, the county will end up collecting much more than it originally was owed," Ford said.