Tax collectors wield a big stick to keep rate strong

• Meeting presentations (PDF)

Pigs may fly before a county tax collector wins a public popularity contest – and that's why the people in charge of collecting the taxes levied by county boards of commissioners must have thick skin. A handful of the best county tax collectors in the state shed their skin, so to speak, and traveled to Raleigh on Feb. 18 to share some of the methods and techniques they utilize to maintain high tax collection rates with members of the NCACC Tax and Finance Steering Committee.

Forsyth County's Pete Rodda and Johnston County's Pat Goddard are both past presidents of the N.C. Association of Assessing Officers, an NCACC affiliate. (Photo by Jason King)

Forsyth County's Pete Rodda said a county will quickly realize the benefits of spending some money and "scrubbing" its database to keep taxpayer names and addresses current.

"If you put a bill in the mail and it doesn't get there, what good has it done?" he asked.

Tax administrators can obtain name-and-address lists from employers – public and private – to locate delinquent taxpayers. Collectors can proceed against income streams such as tenant rent payments to ensure that taxes owed become taxes paid, he added.

Frances Wilson said Chatham County realized dramatic results from outsourcing its foreclosure process to a local legal firm that specializes in foreclosures. The county previously used the "In Rem" method, but by outsourcing it realized a 50 percent increase in collection of past due taxes.

Of the 900 parcels the county turned over to the attorney, only about 150 have yet to pay, Wilson said.

"The same people get the same notices year after year and they ignore us," she said. "[We] have to use heavier measures."

Pat Goddard said Johnston County found that its building community was often in arrears of taxes. By working directly with the financing arm for the developers and builders, and asking for payment, the county sees about a 95 percent cooperation rate.

Goddard said Johnston County's tax collections employees undergo formal training in customer service because of the sensitivity employees need to use when discussing the difficult subject of past due taxes.

"We hear all the reasons about why people can't pay their taxes," she said. "Sometimes you have to do something out of the ordinary to get those taxes paid."

That includes seizing money from bank accounts, Goddard said. The county took just such action against the now-defunct supermarket chain Winn-Dixie, which owed the county $800,000 in taxes. It turned out the money had come from a national fuel account, and the county's actions caused a serious transportation problem for Winn-Dixie. But the county received its tax payment.

"You can't bluff," Rodda said of proceeding against an individual's stream of income or a company's bank account. "We give people time to work things out but once they ignore you …"

NCACC Project Manager John Ed Whitehurst reminded steering committee members about the successes counties have had in collecting past-due taxes through the Local Government Debt Setoff Clearinghouse, administered by the NCACC, the N.C. League of Municipalities and Five Star Computing. The program allows local governments to submit any outstanding delinquent debt (totaling $50 or more) through the clearinghouse to the N.C. Department of Revenue to attempt to offset delinquent debts against individual income tax refunds and N.C. Education Lottery winnings.

Dr. Jack Vogt, adjunct faculty with the School of Government and nationally recognized as the expert in local government capital planning and budgeting, also addressed the steering committee. Vogt provided a primer on capital budgeting and provided an overview of the new capital financing options made available by the General Assembly and last year's federal stimulus package.

Vogt discussed the need to adapt a capital improvement program to current challenges – investing in core functions such as schools, funding only what is mandated, and shortening the forecasting period. He emphasized the need for a county board of commissioners to set financial policies for capital budgeting and finance, such as debt limitations, reserve amounts and forecasting requirements.

The committee will next meet Thursday, May 20, beginning at 9 a.m. at the Albert Coates Local Government Center in Raleigh.

– Jason King and Rebecca Troutman