More Hamilton County residents late with property taxes

A larger percentage of Hamilton County property owners did not get their 2007 property taxes in on time compared to the last few years, according to records from the county trustee’s office.

Almost 15 percent of the county’s 156,422 tax bills were not paid by the Feb. 29 deadline, up from about 14 percent in 2004, 2005 and 2006.

Trustee Carl Levi said determining why some Hamilton County residents do not pay their taxes on time is hard.

“Some people forget,” he said. “Some people don’t have the money.”

According to Matt Murray, associate director of the University of Tennessee’s Center for Business and Economic Research, fewer people have the money.

“The housing market is suffering,” he said.

Property owners who are having difficulties making mortgage payments and whose jobs are at risk are likely to have problems paying their taxes as well, he said. Paying the tax bill, he said, is unlikely to be as high a priority as making a mortgage payment.

Housing market problems are not as bad in Tennessee as in other states but still are affecting the economy.

With foreclosures at record highs, Dr. Murray said less money may be going into the escrow accounts many mortgage lenders require homeowners to have and pay into monthly. Money in those escrow accounts goes toward expenses such as insurance and property tax bills.

Dr. Murray said those accounts may not have enough in them to pay the tax bill at the end of the year.

“I’m going to bet that most of what we’re seeing here is escrow-related,” he said.

But Melanie Reeves, director of marketing and sales for Century Title and Escrow in Chattanooga, said the larger problem could be the lack of an escrow account.

She said mortgage lenders get some insulation from an escrow account if they have to foreclose. Those that do not require escrow accounts have no option but to write the county a check themselves when tax time comes, she said.

“The lender has to step in and pay the taxes,” she said.

The last time about 15 percent of Hamilton County tax bills were not paid on time was in 2003, at the end of the last recession. In 2001 and 2002, 16 percent to 17 percent of tax bills were late.

Mr. Levi said the same group of property owners generally waits until after the Feb. 29 deadline to pay their taxes.

“It’s the same faces every year that don’t pay,” he said.

Starting March 1, the county began adding a 1.5 percent penalty to late property tax bills at the beginning of every month the bills go unpaid.

Mr. Levi said bills rarely go unpaid indefinitely.

If a tax bill is not paid for four years, the county can seize the property and sell it.