If everyone paid their taxes timely, all would benefit. Unfortunately, about two percent of property owners do not. Lien transfers were a practice in Fulton County before I became tax commissioner.
Prior to 1997, my first year as tax commissioner, the collection rate was less than 89 percent with millage rates rising. At $204 million, the delinquent tax roll was more than the 20 percent of collectibles. That $204 million delinquent amount is on par with Detroit today, a city in decay with a collection rate of about 50 percent, where tax payment is voluntary and services are virtually nonexistent. In 1997, we boosted the collection rate to 96 percent and began an unprecedented run of no millage rate increases in Fulton County. The collection rate is now 99 percent, even during the economic downturn.
The scrutiny our office is under seems to be from critics of our work who have a personal agenda and not a public one. The perennial sponsor of bills to curtail lien sales or limit my compensation is State Rep. Wendell Willard whose liens were transferred several times for nonpayment of taxes. Of my critics on the Board of Commissioners, one had liens transferred and the other had two homestead exemptions at one time. They are not above the law and it would compromise the integrity of my office to allow them to be.
In 2002, the Georgia Legislature repealed the statute that made lien sales legal. The Court ruled a remaining statute sustained the legal transfer of liens. In 2006 the Legislature reinstated the old statute with minor revisions because it made sense to do so.
I was elected to optimize the collection of taxes in Fulton County for its citizens — not to maximize tax interest and penalties on collections in Fulton County at the expense of other authorities served. By law, Tax Anticipation Notes are due by December 31. It would be unethical for me as tax commissioner to forego an opportunity to collect and distribute taxes to the two school boards, five cities, 14 tax allocation districts, and 7 community improvement districts in time for them to meet their obligations without penalty. While other metro counties and the state struggle to balance budgets, Fulton County has not raised millage rates, cut services or made layoffs — all due to high tax collections and skilled budget decisions by the Board of Commissioners. By law, a tax commissioner may:
1. Let the payment of taxes be voluntary — and suffer the fate of Detroit.
2. Foreclose on property with delinquent taxes.
3. Transfer tax liens.
Lien transfers in Fulton County give governing authorities and school boards immediate revenue, is the least costly of the three options above, and gives me the authority to have flexibility and reversibility, if necessary.
To be clear, selling tax liens is legal. It is Georgia law.
For more information on tax lien transfers, see my article “In Defense of Good Tax Collections” on my website at www.fultoncountytaxes.org/article.
Arthur Ferdinand is Fulton County Tax Commissioner.
