Good Tax Collections Benefit Everyone

Arthur E. Ferdinand - Fulton County Tax Commissioner

March 10, 2011


As the Fulton County Tax Commissioner, I am elected to collect taxes in Fulton County. I am mindful in my decisions that efficient and good tax collections benefit everyone. Because Fulton County operations rely primarily on property taxes, collecting taxes takes on a whole new meaning. It means jobs in Fulton County; it means being able to afford to provide services to Fulton County residents; to be able to fund Grady Hospital; to contribute to the arts; to maintain the health and safety of the general public; and to insure that our schools are well funded for our children's benefit. Quite simply, it means being able to improve the quality of life for all of Fulton County citizens.

During this economic downturn Fulton County was fortunate to have weathered the storm without having to raise millage rates, cut services, or lay off staff. A combination of high performance tax collections and skilled budget decisions by the Board of Commissioners is the key to this good fortune, while other metro counties and the state struggle to balance budgets.

By law a Tax Commissioner has three options after the initial bills are mailed to taxpayers:

  1. Do nothing and let the payment of taxes be completely voluntarily.

  2. Foreclose on property after taxes become delinquent and liens are placed on the property.

  3. Transfer tax liens after taxes become delinquent and liens are placed on the property.

The first is not truly an option; we can take it off the table.

Option 2 is the preferred means of collecting delinquent taxes by an overwhelming number of Tax Commissioners despite its expedience towards foreclosure. Particulars in the media suggest that most Tax Commissioners collect delinquent taxes themselves, however, the preponderance of these Tax Commissioners use private agencies to facilitate the levy process during property foreclosure. These agencies, acting on behalf of Tax Commissioners, tack on exorbitant fees at the very front of the levy process, as approved by the Georgia legislature in 2009 even though the 10% penalty is supposed to be used to assist the county in paying the expense of collecting delinquent taxes. This process is costly to these delinquent taxpayers, and puts them in peril of losing their homes within weeks of becoming delinquent. And even though, for example, DeKalb commences the levy process immediately after taxpayers become delinquent, it could not replenish the county's budget coffers in time to prevent austere measures: the closing of several libraries and stopping construction on others, closings of schools, cut back on services, layoffs and early retirement of employees. The benefit of utilizing a private agency to facilitate the levy process in almost all circumstances is that the private agency is compensated when the taxes are collected either prior to or at foreclosure from the fees that are added to the delinquent property. This process alleviates the need for the county or city adding personnel and other operating costs which end up being paid for by taxpayers.

Because Fulton County opts to transfer tax liens, the County is constantly criticized by members of the press for this practice. Notwithstanding how many times the entire process is explained, the facts are never presented to the public due to private agendas. Since the lien sale and foreclosure processes are confused in the media, misinformation is passed on to the public.

When a lien is transferred, the lien holder can only apply recording costs, interest and the penalty that would have accrued if the lien was still in the hands of the Tax Commissioner. For the first year at least, and until the lien is presented to the County Sheriff for levy and foreclosure, if still unpaid and ignored, the amount owed the lien holder is essentially the same as if the lien was still held by the Tax Commissioner. So the suggestion that amounts owed on liens purchased under Option 3 skyrocket after purchase, is purposefully misleading and false.

Lien holders do not have property rights; they cannot collect rent, cannot trespass on the property to improve or maintain its curb appeal, and should not pay taxes on the property. The lien holder can purchase other liens placed on the property to protect their interest in the property. The physical appearance of the property on which liens were purchased is a matter of code enforcement against the title holder.

To be clear, selling tax liens is legal and cost counties nothing because the governing authorities get 100 cents on the dollar when liens are transferred. That revenue can be used immediately to provide services to the public and educate our children. In the meantime, the delinquent taxpayer whose liens were purchased has at least a year to repay the debt to the lien purchaser before any foreclosure action can begin. It is Georgia law. This is a far better scenario for taxpayers than the immediate foreclosure process which most Georgia counties pursue.

For my money, if I am having financial difficulty for whatever reason, and unable to pay taxes when due, I would much rather have a year to pay, than to have foreclosure proceedings initiated as soon as taxes become delinquent. At the same time, since the Cities, County, School Districts, Tax Allocation Districts, Community Improvement Districts, all received revenues immediately, millage rates do not have to be raised to compensate for uncollected delinquent taxes. For the vast majority of taxpayers that pay their taxes by the due date, over 95% in Fulton County, this practice alleviates the need for additional governmental staff and operational costs that would add to the burden of all taxpayers. It is a win, win, scenario for the governing authorities and tax payers at large.

2010 was a solid year of tax collections in Fulton County. Even though the 2010 due date was October 31st, by December 31st the Tax Commissioner's Office had collected over 97% of all taxes billed for the 2010 billing season which ends on July 31st 2011. At the writing of this article the City of Atlanta and the County's Collection is already at 98%, Johns Creek and Sandy Springs are 99%, and both School Boards are at 98%. Fulton County's bond rating is at an all-time high despite the bad economy, and its 2010 fund balance was a record $157M, cash left over after all the bills were paid, achieved without a millage rate increase.

This Office prides itself in ensuring Fulton County, the Atlanta Board of Education, the Fulton County School Board, the cities for whom we collect taxes, Atlanta, Mountain Park, Chattahoochee Hill, Sandy Springs, Johns Creek receive their tax revenue timely in order to budget for and provide the services you expect. As importantly, the Board of Commissioners ensures that your tax dollars are spent in the most efficient, effective manner possible, always keeping the taxpayer's interest at the forefront.