Chattanooga considering partial property tax payments

Chattanooga considering partial property tax payments

May 31st, 2011 by Dan Whisenhunt in News

Bill Hullander

Property tax collections in Chattanooga are down this year, and the city's finance director hopes to boost the amount by accepting partial payments, a strategy the Hamilton County trustee recently implemented.

Daisy Madison, the city's chief financial officer, said she budgeted a little more liberally this year in anticipation of an improving economy and extra money from the city's 19 percent property tax hike last year. But her numbers were a little off; according to her records, while she anticipated $107.9 million in collections, the city to date has received $103 million.

Most property taxes are collected between October and February, Madison said. To date the city has collected 95 percent of its projected revenue, a 2.9 percent decrease from last year.

"I think a partial payment arrangement could help taxpayers," Madison said. And voters have asked for it, she added.

The county's numbers are up $2.5 million compared to this time last year, which County Trustee Bill Hullander credits to an improving economy and his partial payment program.

"Folks tell me the partial payments helped them," Hullander said.

The trustee's office has collected $1.3 million in partial payments since the program began, according to figures from his office. Hullander said he did not have an accurate figure about how much the taxpayers who made partial payments owe on their taxes.

Madison said she doubts the city can meet its budget projections by the end of the fiscal year June 30.

Madison said the decline in tax collections "could mean one of two things: They will not be paid or they will be paid later."

Albert Kiser, assistant administrator of finance for Hamilton County, said he expects the county to receive 99 percent of its budgeted property tax revenues by June 30. He said the trustee's figures do not include $1.76 million the clerk and master's office has collected from delinquent taxes in previous years as of April 30.

Madison said the city will recapture the other money eventually through the delinquent tax process. And it shouldn't affect the current year's budget because the city has spent $4 million less than anticipated. Madison said positions in the police and parks and recreation departments weren't filled until later in the fiscal year. Many positions are still vacant in the police department, she said.

But meanwhile, Madison said she recently received authorization from the state to develop a plan for partial payments.

"Quite honestly, it's something we've gotten requests for on a number of occasions," Madison said.

Jackie Ware, deputy clerk at the trustee's office, called partial payments a "service to the people."

The county also collects property taxes for the Department of Education, and those figures show a $628,809 increase compared with last year's collections.

However, the department of education also showed $669,524 in property tax refunds this year and $605,749 last year, an amount it split with the county. Hullander researched the issue Friday and said much of the refunds have to do with double payments on taxes.

He said when a mortgage company sells a house, often the mortgage and title company will both pay the taxes due. He said $960,000 in refunds happened because of double payments.

"For some reason the mortgage company is not sending word they sold the house," Hullander said. "I'm surprised that happens a whole lot. It's just a standard thing that happens. We get paid twice."

Contact staff writer Dan Whisenhunt at dwhisen hunt@timesfreepress.com or 423-757-6481. Follow him on Twitter at http://twitter.com/DWhisenhunt.