In-depth coverage
The Atlanta Journal-Constitution has uncovered a number of problems stemming from the Fulton County Tax Commissioner’s Office’s sales of tax debts to private collection firms. Previous articles described how homeowners didn’t know their taxes were overdue until their homes were being auctioned or they were billed thousands of dollars in penalties and interest to settle small debts. Arthur Ferdinand has also taken heat for being the state’s highest-paid elected official through personal fees from tax collections in Atlanta, Sandy Springs and Johns Creek.
This year, the AJC revealed how Ferdinand’s quick sales of delinquent tax bills, before the county collected a 10-percent penalty, handed as much as $20 million in potential revenues to Vesta Holdings, the biggest lien buyer, with a corresponding $20 million loss to taxpayers. The AJC also discovered that Ferdinand had dipped into his budget to buy a 2013 Ford Explorer Limited for $39,000, which he can use for his commute to work.
Another investigation, published Sunday, revealed that Ferdinand personally intervened after a tax debt owed by Atlanta Mayor Kasim Reed’s real estate holding company, Cascade Investors, was sold to Vesta. The Tax Commissioner’s Office got the debt transferred back to the county, then later filed documents asking the Superior Court Clerk to remove all liens filed against Cascade from the record.
Another effort is brewing to cut the pay of the state’s highest-paid elected official – something frequently attempted but never accomplished.
Instead, pay has shot up for Fulton County Tax Commissioner Arthur Ferdinand over the years as he has found more ways to profit from tax collections. On Wednesday the Fulton County Commission formally asked state lawmakers to cut off one of his income sources — a 50-cent fee he earns every time his office sells a tax debt to a private collection firm. Commissioners were unaware of the arrangement until it was exposed in an investigation by The Atlanta Journal-Constitution in August.
Ferdinand is likely the only Georgia tax chief keeping that fee, which also fattens his paycheck when delinquent taxpayers pay off a lien on their own. He has been pocketing roughly $22,000 to $31,000 extra per year. That boosted his pay last year to about $383,000 for a job where he started out earning $77,400 in 1997.
Commission Vice Chairwoman Emma Darnell, who represents the western portion of Atlanta, called the practice “citizen exploitation,” giving the tax chief a personal financial incentive to transfer more liens to profit-driven investors.
If they don’t get paid, those investors can auction off homes to settle accounts, and some homeowners have complained that has happened over relatively small sums that they didn’t know they owed.
“It is a burden to a taxpayer who’s already scrambling to keep his house,” said Darnell, who proposed the resolution approved by the board 6-0.
Her resolution also calls on Ferdinand to give up the practice on his own. But the measure has no binding effect. And while the commission sets the budget for the tax commissioner’s office, it otherwise has no authority over a fellow elected official.
Regardless, some state lawmakers already were planning to repeal the law Ferdinand has been using to collect the fees.
“I think the perception of the public is, there’s an enrichment beyond what is deserved,” state Sen. Vincent Fort, D-Atlanta, said. “As an elected official, he should understand the uneasiness that the public has.”
Ferdinand did not respond to a message from the AJC seeking comment about the issue.
Earlier this year, Ferdinand’s only response to questions about his personal profits and the potential conflict was to cite the state law that the Fulton County Attorney’s Office said justified the payments. That law dates back at least to the Great Depression, when most tax commissioners earned their pay through fees.
Ferdinand said of his motives in a July email, “My intent is to make sure taxes are paid as quickly as possible.”
While Darnell’s proposal would cut Ferdinand’s pay by tens of thousands of dollars per year, he would still earn roughly $350,000 per year. That’s more than twice as much as Gov. Nathan Deal and nearing the pay of President Barack Obama.
Most of his pay comes from a separate fee he pockets, the $1 per parcel he charges to Atlanta, Johns Creek and Sandy Springs for adding their city tax bills to county tax bills.
Ferdinand started billing the county 50 cents for every tax lien settled or sold off in late 2010, the AJC found. He also sought payments going back to 2002, but the county would agree only to go back to July 2007.
He started receiving the fees in 2011, including a lump sum payment of more than $87,000 that boosted his total pay that year to more than $438,000.
The approval to pay him was given quietly, discussed between Ferdinand’s office, the Finance Department and county lawyers, but not with the County Commission. Interim County Manager David Ware, who was county attorney at the time, declined to speak to a reporter Wednesday when asked why the deal wasn’t disclosed to commissioners.
North Fulton Commissioner Liz Hausmann said the fees should go to the county, as they did before Ferdinand got them diverted.
Past efforts to reroute some of Ferdinand’s pay have failed.
Six years ago, state Rep. Wendell Willard, R-Sandy Springs, sponsored a law designed to regulate cities’ payments to counties for tax collections. But Ferdinand contends the law doesn’t trump his pre-existing contracts with the three cities to collect the $1-per-parcel fees.
In 2012, Willard and state Rep. Lynne Riley, R-Johns Creek, were part of another fruitless effort to stop Ferdinand from earning the fees from cities. The Georgia Association of Tax Officials successfully shot that down, arguing that the measure would weaken the power of tax commissioners statewide.
Another try came in this year’s session, when Republicans introduced House Bill 346, which would would make Fulton’s tax commissioner an appointed county official again in 2017, serving at the will of the County Commission. That bill stalled in the Senate but will be back in play next year.
Willard said stopping the 50-cent fees won’t be nearly as complicated, just a matter of removing an archaic law from the books.
“I think this is a no-brainer,” he said. “Everybody says it’s ridiculous, it’s wrong. It’s just an old statute, and he’s taking advantage of it.”
In 2010, Ferdinand earned $1 off the sale of two liens worth a combined $660 on the Reynoldstown home of Sam Gris.
Gris, a former Alpharetta police officer, said he never received notice of the unpaid sums and only found about the liens through a credit check.
“If I had been told I would get (a cut) off every citation I wrote, then that would have been a pretty big incentive to write tickets,” Gris said. “And that’s essentially what he’s doing.”
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