Erie County will spend more money in 2017 than ever before cracking down on property owners who repeatedly fail to pay their county taxes. And that money will enable the county to pursue foreclosures against more delinquent property tax payers, overall, than it has in the past 15 years.
That's one of the highlights of a $1.72 billion county budget unanimously approved Tuesday by the County Legislature.
"We don’t want scofflaws to get away with something when the majority of property owners comply with the laws," said Timothy Callan, the county's deputy budget director.
The budget, which included $2 million worth of amendments, sets aside $1.17 million for legal costs to pursue foreclosures against about 1,500 tax-delinquent property owners, including up to 500 Buffalo property owners behind in their taxes for years.
"We’re becoming more aggressive within the city limits," said Joseph Maciejewski, the county's director of real property taxes.
The county will also free up $1 million to cover higher-than-anticipated short-term debt payments, as well as provide more funding for a laundry list of community, cultural and arts organizations sought by the county's 11 legislators.
As previously reported, the county had not foreclosed on a city property in more than a decade until this year. As of August, more than 3,000 property owners in the city owed nearly $1.8 million in property taxes to Erie County through 2015 even though they had paid city property taxes, according to a Buffalo News analysis. More than half of those owners failed to pay their county taxes for at least three years.
The county began cracking down on city property owners this year for the first time since 2005, threatening foreclosures against nearly 150 of the worst offenders and generating more than $750,000 for the county in city tax payments and proceeds alone.
The county used to auction city and suburban properties for back taxes twice a year. But in 2003, the county began selling its back tax liens to a third party in exchange for upfront cash.
The county’s red-green budget crisis struck the following year, resulting in the layoff of 27 employees from the county’s Department of Real Property Tax Services. The county restarted foreclosure actions against suburban properties in 2012 by hiring an outside law firm to do that work.
But it wasn't until this year that the county attempted to pursue city property owners. Before this year, the county deferred to the city to conduct property foreclosures. As a result, many tax-delinquent property owners paid their city taxes but did not pay their county taxes.
The county has slowly ramped up foreclosures but the numbers have been small overall. This year, however, with the help of surplus money from the 2015 budget, the county pursued foreclosures against about 1,000 county property owners, Maciejewski said.
The county's year-end surplus for 2016 is expected to be much lower than last year's, especially in light of year-end payments that must be made to Erie County Medical Center for care of the poor and underinsured.
In light of this, the Poloncarz administration asked the Legislature to earmark an additional $1 million in the 2017 budget to the county Law Department to pursue foreclosures, bringing the total to $1.17 million.
The county's overall, proposed operating budget would grow spending by 1.15 percent – or $16 million. The county tax rate will decrease slightly to keep the budget within the state tax cap limit, Erie County Executive Mark Poloncarz said.
The property tax levy – the overall amount of taxes collected by the county – will rise by 5.56 percent, the highest percentage increase since 2008. Poloncarz attributed the tax levy growth to new construction countywide, not to an overall increase in property values.
County lawmakers passed the budget unanimously with little fanfare or controversy Tuesday. Legislature Chairman John Mills, R-Orchard Park, called this a testament to the Republican-supported majority's willingness to collaborate with the administration's budget office and with members of the Democratic minority.
"It was clean. It was business-like. And, I think the taxpayers of Erie County appreciate this," Mills said.
The lack of contentiousness was also a result of the administration freeing up additional funding to cover legislators' personal requests, while still lowering the tax rate.
The administration had an additional $2 million to cover budget amendments because the county belatedly learned that principal payments on a major loan for construction projects won't be due until 2018, Callan said.
Big winners for last-minute funding boosts include the African-American Cultural Center, the Lancaster Opera House, the Buffalo City Mission, the Cornell Cooperative Extension and the Buffalo and Erie County Naval and Military Park.
More than 50 other local organizations that had not been allocated funding under Poloncarz's proposed budget ended up with grants of $1,000 or more.