Ask an Official: County clerk discusses seizure of tax delinquent properties
This week’s featured question was submitted for Lincoln County Clerk Chris Marlowe.
The question reads:
“What is the process for seizing properties for back taxes? Are you aggressively working on this as I heard there are 450 properties in Lincoln County behind on taxes? With the recent County budget deficit would it help to be more aggressive in taking the properties while they are worth something instead of waiting longer?”
Answer as given by Marlowe:
“First off, the word “seize” is a little harsh. I prefer the word acquire in this instance. I would like to assume that everyone is aware that when they own property they are required to pay property tax and if they do not, there is indeed some kind of recourse. Every opportunity is given to the current home owner to retain their property, especially in cases where we are dealing with someone’s homestead.
“The county will be more “aggressive” with properties that have zoning violations and/or are used for rental income. The process for taking a delinquent property is referred to as; “the tax deed process”. This process is rigidly defined in chapter 75 of the Wisconsin State Statute Book. As you can imagine when taking someone’s property it is incredibly important that all the defined requirements are met. There are required measures that specify who within the county must act. There are also requirements that must be met but are not defined by whom.
“This is where you will find that almost every county’s procedure for the taking of a tax deed differs from one another. Here in Lincoln County the process entails as many as four different departments and sometimes as many as seven. State Statute defines that the county clerk will present a list of delinquent properties, to be acquired by the county, to the full county board. The county board then decides whether or not to approve the taking of the delinquent property. By the time a single property is presented to the county board, it is at minimum 35 months delinquent and the owner will have received several notices of the county’s intent.
“Is the county aggressively working on this? I would like to think we are doing the best with what we have. Government offices and departments are at a very lean state, meaning staffing is at a bare minimum. Today’s county governments are trying to maintain current levels of service with less money and fewer people all while the cost of these services rise with inflation. With this being said, we are not at the liberty of creating a department or staffing our current departments with extra people to help with the backlog of delinquent properties. We make do with what we have. Our forestry department is responsible for the sale of all county owned land. They also manage our forests including the maintenance of our trails and parks. They cannot possibly handle an overly aggressive approach to our delinquencies.
“The number of delinquent properties in Lincoln County is not an anomaly. This number mirrors the health of the economy. The recent numbers are a reflection of the 2008 recession. The number of delinquent properties peaked around 2013 and is slowly declining since. Numbers throughout the county are similar in each of our municipalities and vary with the population of each. We can use the City of Merrill as a microcosm of what is occurring county wide. In Merrill alone there are 4270 real estate parcels. Of these 4270 parcels, there are 53 parcels that in December will be at least 35 months delinquent, or slightly better than 1%. I can assure you that these 53 delinquent properties are indeed on our radar and are being dealt with. Payment agreements are offered to these owners which some do take advantage of. As long as an owner maintains their agreement, their property will not be taken.
“How does this affect the county budget?”
“It’s not what you would expect.”
“State Statute requires the county to write off the twelfth year of a delinquent property, meaning, you can only collect on 11 years. Although there are a couple exceptions, we do not let the taxes go that long. Annually we write off approximately $1500. This number pales in comparison to the next number. Although municipalities do collect for a short time on the current year’s tax, the county is responsible for collecting property taxes.
“At the end of each tax cycle the county then divides the taxes among the taxing entities (state, school, municipality, and county). Regardless of the fact that taxes may not have been payed, the county actually pays the other taxing entities what they have coming. We refer to this as making the other entities whole.
The county, in essence, is loaning a property owner money to pay their portion of their
state, school, and municipal property taxes. The only entity at this point that loses is the county. State statutes do address this by allowing counties to charge a 1.5% interest per months on the money they have loaned the current owner. This 1.5% monthly equates to 18% annually. Because we do eventually collect on all taxes owed, except the approximate $1500 per year we write from the books, the county annually realizes approximately $350,000 in revenue off the 1.5% interest per month we collect on our delinquent taxes. This is hard to grasp and even more difficult to explain. A property that is 35 months delinquent is subject to a 35% penalty on that oldest year.
“This is a harsh reality and is clearly defined by state statute. The hardest part of all this is seeing someone on a fixed income or someone who has fallen on hard times fall too far behind. There comes a point of no return. It is a very difficult conversation with someone who is elderly and has perhaps lived in their home for 50 years. I do not like to be the one that suggests different living arrangements.
“As your county clerk I would much rather see everyone current on their property taxes and the county governments deal with their shortfalls elsewhere. But, on the other hand, 99% of the tax payers pay their taxes before their properties become subject to the tax deed process. So, in a nutshell: The county does have a very detailed plan to deal with our delinquent tax rolls. We are indeed aggressively working on this issue with the employees we have. Our County budget shortfalls are by no means a result of our property owners not paying their taxes. In fact, if everyone were current on their taxes, a very large revenue source for the county would be gone.
“Lastly, State Laws are made by our State Representatives. Any changes to the current Tax Delinquent Process would be made by them. County Government is an extension of our State Government. Our duties and parameters are set by the State. There is no leeway for Counties. Everything we do is defined by Statute.
Have a question or concern you would like to address? Simply send your question or concern to firstname.lastname@example.org along with an indication of which entity your question or concern pertains to. Current participants are the Merrill Police Department, Merrill Fire Department, Tomahawk Police Department, Lincoln County Administrative Coordinator Randy Scholz, Merrill City Administrator Dave Johnson, Merrill Area Housing Authority Director Paul Russell, Lincoln County Clerk Chris Marlowe and Merrill Area Public Schools (MAPS) Superintendent Dr. John Sample. Please note: Those who submit to the ‘Ask an Official’ feature remain anonymous.