Property tax delinquencies on the rise in Douglas County

More than $3 million in property taxes remains unpaid in Douglas County, leaving local governments to calculate how the shortfall might affect their already-thin budgets.

Property owners in the county have yet to pay $3.03 million in taxes owed on 1,274 properties this year, according to the Douglas County Treasurer’s Office. That’s up $882,055, or 41 percent, from the $2.14 million owed on 1,160 parcels at this time last year.

“People are struggling,” said Paula Gilchrist, county treasurer.

But the relatively rapid rise in unpaid taxes will not be expected to cut significantly into local governments’ budgets — at least not this year, said Craig Weinaug, county administrator. That’s because the delinquent taxes represent only about 2 percent of the county’s overall tax bill, and most governments already anticipated that the delinquency rate would be at least that high.

“We anticipate it,” said Weinaug, whose budget this year factored in an expected delinquency rate of 2.5 percent, a rate calculated to rise to 3 percent for 2010. “If somebody else didn’t anticipate that rate of delinquency, then it would cause a problem.”

But next year will put even more pressure on governments when it comes to property taxes. While the latest round of tax bills came after property valuations had fallen an average of 1 percent, Weinaug said, the next round will be based on valuations that already are down by 9 percent or 10 percent.

That would mean less money for local governments, unless tax rates were to increase to make up the difference — and people continued to pay their taxes.

“We know next year will be a lot worse for us, even if the economy is turning around right now,” Weinaug said.

Property owners paid their taxes in December and May for the 2008 tax year, which helped finance this year’s budgets for county, municipal and other local governments. Owners of properties with unpaid taxes are being charged interest and fees until the bills are satisfied.

If a bill remains unpaid for three years, the county can auction a property and use proceeds to pay its tax bill, Gilchrist said. Properties with unpaid tax bills as of May 10 would first become eligible for a county-ordered auction in September 2012.

“Chances are, 99 percent of the people on this list will pay their taxes before it ever goes to a tax sale,” Gilchrist said. “At this point, we’re not terribly alarmed.”