Tough economy impacts county, city tax revenues
In terms of tax collection, “close but no cigar,” is an expensive phrase.
Each year, Catawba County aims to collect 100 percent of taxes in the county, including those in its municipalities. The county usually comes very close to its goal, averaging about 97 percent in recent years.
But that other 3 percent comprises a whole lot of potential revenue.
Last fiscal year, for example, the county collected $77,216,606 (97.27 percent) in real estate and personal property tax from its county residents, but had $2,167,872 outstanding.
In Newton and Conover the story was similar, with each municipality collecting 97 percent of its real estate and property taxes while having a combined uncollected amount totaling more than $340,000.
In an economic climate where unemployment and bankruptcy are everyday words, 97 percent of a cigar might just have to be good enough.
“We can only collect what’s out there,” said Ona Scruggs, Catawba County tax collector. “With the high rate of unemployment and bankruptcy, some people don’t have money. If they don’t have a job and don’t have a bank account, there’s not much I can collect.”
Factors linked to the recession aren’t the only reasons that make the goal of 100 percent seemingly unattainable. Scruggs said deaths linked to estates as well as quick moves out of state also make it nearly impossible to collect all tax revenue.
Catawba County tax collectors use procedures like wage garnishments and sheriff’s levies to try and reach their goal, but even those procedures are useless in some situations.
“If you have personal property or real estate, we can work with people, but we can’t collect what’s not there,” Scruggs said. “We can do garnishments and levies, but if the person isn’t to be found or is found and is not working, has no income or bank account, then there’s not anything we can collect.”
Since 1993, Catawba County has billed and collected taxes for all cities and towns within its borders.
During the 2010-11 fiscal year, the county collected $4,713,566 in real estate and property taxes on Newton’s behalf, leaving about $217,000 uncollected. For Conover, the county collected $4,140,418 in real estate and property taxes, leaving about $126,573 outstanding.
Conover Finance Manager Vickie Schlichting said 97 percent has been the average collection rate for Conover in recent years, excluding motor vehicle taxes. She agreed with Scruggs that in a challenging economic environment, the county’s collection rates are about as good as they get.
“If there are no wages to garnish and no accounts to attach, there isn’t much they can collect,” Schlichting said.
Even after a fiscal year is over, the county continues to collect prior and delinquent taxes each year. As those prior taxes are collected over time, the county inches closer to its goal of 100 percent and more tax revenue is generated.
Currently, the county has collected about 99.63 percent of the 2007 taxes, 99.27 percent of the 2008 taxes and 98.71 percent of the 2009 taxes.
“The last four-tenths of a percent are real hard to collect sometimes,” Scruggs said.
As prior taxes are collected over time, municipalities still receive that tax revenue.
“Our system is set up that any payments we receive is divided by the rates. They get their share and we get our share,” Scruggs said. “Even if we’ve collected a bill that’s ten years old, the city is going to get their share.”