Erie County is cheating its taxpayers. It is doing so by failing for years to go after its tax cheaters. It needs to rethink its indifference.
The problem for Erie County is expense. As a consequence of the disastrous 2004 budget crisis, the department that ensures tax compliance was gutted, leaving it with too few resources to go after 3,000-plus property owners in Buffalo who owe the county a total of nearly $1.8 million.
These are people who, generally speaking, promptly pay their city taxes, perhaps because they know that after a year of nonpayment, the city will begin foreclosure action. Those same people seem to understand that the county has no similar interest in requiring them to meet their obligations. So they don’t, and that leaves other county taxpayers to take up the slack.
This is, for the most part, self-defeating. If the county spends more on chasing deadbeats, it will bring in more revenue. More than that, it will fire a warning shot at those who might be contemplating the advantages of withholding tax payments.
The county has begun addressing its problem, and the early results show that a more concerted effort is needed.
County officials earmarked money from the 2015 budget surplus to foreclose on derelict city properties. Because of that threat, more than 60 property owners paid the county more than $200,000 in back taxes and fees, according to conservative estimates by The News based on county records.
That demonstrates the bottom-line value in changing the terms of the calculation for property owners.
And it is a calculation. As a story in Sunday’s News shows, when recalcitrant taxpayers face consequences, they get religion.
For example, the company that owns Landhouse Millicent Village, a series of townhouse-style apartments in the Kensington-Bailey neighborhood, made good on $40,000 in back taxes only after the properties were slated for county auction. For five years, it had ignored its county tax bills.
It’s not an uncommon story.
The Elmwood Heights apartment complex is owned by Rockland County interests. Elmwood Heights LLC has stayed relatively current with city property taxes while owing the county four years of back taxes and interest adding up to more than $29,000, the highest outstanding county tax debt found in The News analysis.
Part of the county’s problem is the comparatively low value of city properties – and thus of the taxes owed. The county is more diligent at pursuing suburban deadbeats, because property values are higher and there are more tax dollars to collect.
Those problems replicate themselves within the city limits. Of the more than 3,000 property owners in arrears, only 400 owe more than $1,000. That’s an important cutoff, because it costs the county up to $1,000 in outside legal fees for each property on which it takes foreclosure action.
Even still, it’s likely that fewer of those people would have fallen behind if the county were more diligent at insisting on compliance. Reputation matters.
But the number of properties owing less than $1,000 also suggests the need for an alternative to foreclosure as a way to produce compliance. That can include working with property owners who are in financial distress and need some kind of accommodation to make good on their obligations.
But, plainly, the county cannot simply continue as it has been for 12 years. It’s not only damaging to county finances, but unfair to the many taxpayers who, year after year, pay what they owe.
It’s been 12 years since the “red budget/green budget” fiasco engineered by then-County Executive Joel Giambra. It’s long past time for county taxpayers to stop paying the price for it.
The county is taking temporary steps to remedy the situation. Whether it becomes a permanent solution will be depend on how seriously county legislators and County Executive Mark C. Poloncarz view their failure in the City of Buffalo.