Many towns and cities in Maine are experiencing significant increases in the number of property owners unable to pay their taxes, leading to more liens being placed on those homes and businesses.
Jim Murphy — who is an assessors’ agent for several midcoast towns including Union, which saw a 44 percent jump in liens to 118 in the last year — said he is not sure why there has been such a sharp increase.
“Each individual homeowner has a reason for not paying. That there are so many is a concern,” he said this week.
There were 71 liens filed in 2007 in Union, before the so-called Great Recession began.
Eric Conrad, director of communications and educational services for the Maine Municipal Association, said while the association does not maintain information on the number of liens filed by towns, anecdotally he has heard of an increase in them statewide.
“The economy is not picking up,” he said.
The Maine Bureau of Revenue Services’ property tax division also does not maintain statewide lien information.
But an informal survey by the Bangor Daily News indicates that many other midcoast towns are seeing increases in the number of tax liens they are filing, although most were less dramatic than Union’s.
Belfast put liens on 306 properties, up 10 percent from 278 in 2011. The amount of taxes owed on those liens is in excess of $500,000. In 2007, there were 251 liens filed.
Rockland filed 187 liens earlier this month, up only four from 183 in 2011. The city filed 166 liens in 2007.
Rockland Tax Collector Susan St. Clair said notices are sent out by certified mail to each property owner who has not paid taxes in full 30 days before the liens are to be filed. She said in some cases people had paid their taxes late and sent in a payment but failed to pay the interest charge and then they end up with a lien.
She said in other instances, such as with businesses, a tax payment may just slip through the cracks. For instance, she said the company with the greatest amount of taxes owed to the city from the liens filed this year contacted her Tuesday after it had received a telephone call from the Bangor Daily News asking about its lien status. The company representative said she was unaware that the bill had not been paid and the money was being sent immediately.
Camden filed 98 liens, up from 93 last year. Camden filed 66 liens in 2007.
Thomaston filed 115 liens earlier this month, up from 90 in 2011. The town filed 69 liens in 2007.
Once liens are filed on a property, the owner has 18 months to pay off the delinquent taxes, interest and the fees incurred by a municipality to file the documents at the county registry. If the taxes are not paid after 18 months, the properties are automatically foreclosed on by the local governments.
Conrad said municipalities have no interest in acquiring properties in this manner.
“Municipalities don’t want to be in the property business, They don’t want to own properties. They do what they can to work with the property owners,” Conrad said.
John Falla said that in the 25 years he has been town manager of St. George, he is not aware of any time the town has taken a property from an owner who wanted it. The town has a policy of working with property owners to work out payment plans.
Still, St. George placed 164 liens on properties this year, up sharply from 100 in 2011. Falla said he believed that 64 percent jump was due mainly to a change in the town’s tax year and the decision to bill twice a year. He said many people came in after the lien notices went out and said they simply had forgotten to make the second half installment on property taxes.
In 2007, St. George had 56 liens applied to properties.
In Waldoboro, the number of liens filed this year totaled 268, up from 252 in 2011. Waldoboro Tax Collector Rose Roy said the number fluctuates from year to year, adding that this year was not the most she has ever filed.
After the liens are filed, she said the town will send out notices alerting the owners that they risk losing their properties if they do not pay off the back taxes, interest and fees. Typically, 60 to 70 notices are sent out near the foreclosure deadline, Roy said and 12 to 13 properties are foreclosed on each year.
But town officials, Roy said, still work with the former owners to pay off the taxes and regain their properties. When that fails too, the town eventually will sell the properties to collect the tax.
In Rockland, the city acquired one property this year through tax foreclosure. The property was a single-family home on Limerock Street with a three-quarter-acre lot.
The property is assessed by the town at $164,800. The city sought bids on the property on July 2 but received none, according to Rockland City Attorney Kevin Beal. The city then listed the property through a real estate broker and it remains for sale.
The property is being sold for $25,000, Beal said, noting that it needs a lot of work such as repairs to the roof. Properties that are taken for nonpayment of taxes often are sold at far less than their assessed value anyway, Beal acknowledged.
The lien on the Limerock Street property was for $1,694 in property taxes.
The city will issue a quit claim deed to someone who buys the property, meaning the city quits any claim it has to the land or buildings. Beal said that all the city is selling is its interest in the property.
He explained that state law dictates that foreclosure from a tax lien wipes out other liens but that other lien holders, such as a bank, still can challenge someone’s ownership after the fact. Since quit claim deeds do not provide any guarantee of title, such sales are for far less than the real value of the property.
Thomaston assessors’ agent David Martucci said more properties are not foreclosed on for nonpayment of taxes because banks will foreclose on the property owner first and the bank then will pay the back taxes to protect its investment in the property.
There have been 117 foreclosure notices filed thus far this year in Knox County by banks, according to filings recorded at the Registry of Deeds. This is down from 144 filed for the same period last year. There were foreclosure actions taken by banks in every community in the county, with the most being filed in Rockland, with 22 notices. The second most was for properties in Rockport, with 13 notices, followed by 10 each in Camden and Warren.
Murphy, the assessor’s agent for several towns, said that in addition to bank foreclosures, there are many instances of people simply moving out of homes when they are unable to keep up with mortgage payments. He said he is seeing an increase in auctions in which ownership of the homes then immediately goes to the bank and then to a new owner.
This has created a shadow real estate market which he acknowledges has dragged down the price of homes on the lower end of the price range.
“I’m seeing properties that are going for 40, 50, 60 percent [of their value],” Murphy said.
When there is an increase in people not paying their property taxes, it also means that municipalities’ revenue flows are squeezed. Municipalities must borrow money from banks in the form of tax anticipation notes in order to meet payrolls and pay operating costs.
Murphy noted, however, that the municipalities eventually gwill et the tax money, although it may be a few years later than when it was expected.
Fortunately, the interest rates on such loans are near historic lows. For example, Rockland is paying 0.98 percent on its tax anticipation notes this year.
But the state allows municipalities to impose an interest rate of up to 7 percent on delinquent property taxes. Most municipalities will impose the maximum rate, saying it is needed to encourage people to pay their taxes.
The issue has been a point of contention in Rockland at times when councilors have debated whether the rate the city imposes should be less to offer relief to people facing difficult financial times.
Rockland Finance Director Tom Luttrell said the city had not borrowed any money for the past two years but borrowed some for a two-week period in September until property taxes began being paid for this year’s bills.
This is all that is trickling down on Maine.
So who thinks the middle class begins at $200,000 per year, heah, like Mitt Romney does ?
Obama does for one. He says $250,000 is where the middle class starts.
Are you mistaken, misled or can you find us a link to Pres. Obama actually saying that,
please, so we need not consider the the third possibility ?
Misread that one. My bad. But Romney says it starts at
$200K to start?
Obama also has set his definition for “middle class” as families with income of up to $250,000 a year.”
http://www.huffingtonpost.com/2012/09/14/romney-middle-income_n_1883819.html
“…Romney told “Good Morning America” that the definition of middle income in America is “$200,000 to $250,000 or less.”
http://news.yahoo.com/blogs/ticket/mitt-romney-does-not-think-middle-class-starts-181052583.html
Still standing by.
Not sure how many references you need.
“Obama also has set his definition for “middle class” as families with income of up to $250,000 a year.”
http://www.dailyfinance.com/2012/09/14/romney-middle-income-between-200k-and-250k/
And Romney didn’t say it starts at $200K. You had that part wrong:
“Romney’s comments came an interview broadcast Friday on ABC’s “Good Morning America.”
“Is $100,000 middle income?” Stephanopoulos asked.”No, middle income is $200,000 to $250,000 and less,” Romney responded.”
http://www.dailyfinance.com/2012/09/14/romney-middle-income-between-200k-and-250k/
Personally I worry about the country in the hands of either inept pinhead. But I can’t afford another 4 years of the sitting President.
Sorry to test your patience all night but I had to go to work.You seem to be wanting taped video of him saying this. So, are you saying HuffPost and the others are lying about hm saying this? You don’t think POTUS and admin would be all over these folks?
> Are you STILL mistaken, misled or can you find us a link to Pres. Obama actually saying that, please, so we need not consider the the third possibility ?
The best we’ve gotten is:
“Obama also has set his definition for “middle class” as families with income of up to $250,000 a year.”
From;
http://www.huffingtonpost.com/… off the AP WIRE.
You did not link to Pres. Obama saying that, and to the context of him doing so, did you ?
I think that is just convoluted misinformation, at best, but it is fast becoming a common conservative lie, as it IS repeated without any supporting context.
I can not prove that what I believe to be a lie MIGHT NOT be true, can I ?That’s just logically impossible.
Sorry, it’s just a fact, that no one can prove that any mistaken faith based BS is NOT, or, may-be, might not be true.
So can you please prove that what you claim IS the truth, IS the truth, with some context, and a link, to Pres. Obama saying what you claim he has said,
as you were asked, or not , Dick ?
Jim Murphy — who is an assessors’ agent for several midcoast towns including Union, which saw a 44 percent jump in liens to 118 in the last year — said he is not sure why there has been such a sharp increase.
“Each individual homeowner has a reason for not paying. That there are so many is a concern,” he said this week.
This is NOT rocket science! Think about it for a minute, costs are going up, gas, groceries, insurance, fees, taxes, licenses, to name a few…and those who are fortunate enough to still have a job are not getting raises. People simply do not have enough money to pay their property taxes which continue to rise almost every year… Towns continue to spend money they do not have, its as if they don;t know that times are bad? Ellsworth is a great example, buying property, building schools, hanging onto surplus town property, road work, a new treatment plant, new docks at the waterfront, studies on a new park, more town employees, high municipal salaries, it is simply irresponsible spending. This is a sleeping giant folks, and its only going to get worse. Where are we all going to live when we lose our property that we have worked so hard for? People need to complain loudly and get spending back under control, both locally and beyond!
I just noted that Ellsworth filed 800 liens in the last year. Granted, some of those are business property, but WOW! There are about 3000 residential properties, and a population of 7000+-, add in 1000 commercial properties, say 4000 total properties, 800 liens looks like 20% of all properties have a lien….that is huge!
Taxes in Ellsworth are ridulously high. If you complain they just say it is because of the schools being over budget. I think we need a local sales tax to support schools, and a some sort of sliding scale as to income, people with fixed incomes are struggling, most want to pay, it is just sometime the money is not there. Taxes are a real burden, seems once a year goes around faster and faster. In Ellsworth the divide the bill between september and March, I thnk mostly to make the bills look smaller. At 100% evaluation, well that was done before the Great Resession, but I have never seen any reduction in the bills, nobody takes in consideration the economy is not able to support these high taxes, some properties have tax bills now, that equal what it cost to build the places.
Two very good points. The wages are stuck in the early 90’s thanks to “free” trade and the governments, local, state, and federal continue to tinkle money away like we are all paying taxes on good paychecks. Just like we used to do, before all the jobs and money got sent to communist China.
That shack with only a 3/4 acer lot in the pic is assessed by the town at $164,800 :-0
No wonder folks can’t afford a house anymore :-/
What about people who already own their home, free and clear? I think of older folks, they own it, but are in jeopardy of losing it because they can’t pay the town…..
Yup and their monthly tax payments are most likely higher than what they were paying for the mortgage :-/
Seniors should not pay income or property taxes, period. They have payed their whole life and should get a break when they are on a fixed income and retired. They have done their part.
Try running that past the Republicans in control in Augusta. They already reformed the Health Insurance that made it more expensive for rural and older Mainers.
Augusta? We don’t need no stinkin’ Augusta! The only thing they do in Augusta is take a lot of perfectly good ideas and intentions and turn them into bureaucratic nightmares. Then send us the bill for their ineptitude. We need to act local and tell Augusta and Washington to quit trying to be our friends. With friends like those guys, who needs enemies? That goes for both sides of the aisle, they are both guilty of making this mess.
I think it is critical to break this down between second homes on the coast and primary residences.
The two are not the same.
Without that , besides ” times are tough ” what does this information really say ?
Are you alluding to some other information that you may have? I sure would like to hear it. I agree that my information is a little general, but I did some actual research on the Hancock County website. What have you come up with so far?
“Are you alluding to some other information that you may have?”
Did I ?
How ?
It is just an obvious point.
Sincerely, what is yours ?
But another obvious thing is unless a property is free hold, if the taxes are not being paid that clearly suggests that the mortgage payments are not being make, too.
Well, you said “Besides times are tough” just wondered if you know of other compelling reasons why people are not able to oay their property taxes….Other than towns spending money they don’t have, LOL
There are always the people who spend the tax money (or the rent money, or the food money) at Hollywood Casino, or out on Ohio Street after dark.
When the Fed and the State send unfunded mandates to local communities. Those communities need to tell the Fed and State to go pound sand. Local communities don’t have a money tap, other than their property tax. When the citizens of these towns are living on fixed incomes or frozen wages, trying to juggle the rising costs of gasoline, food and heating fuel have had enough, who are they going to turn to?
Every town has the same ole people who pay their taxes late or dont pay them…Love reading the town reports, You wont find my name in one… That is one priority that gets paid, I would be embarrassed if my name was in there … Some people dont care..Pay your taxes slackers!!!!
You are fortunate to be able to pay them on time. Most people are very embarressed to see their names in the report, but they just can’t help it. I know, I know, if they can’t afford it they should sell it right? Would you want to have to sell the home you have lived in for years? Raised your family in? Just sayin’
Its not bad if you are in there once in a while, but it is the ones that are in there every year and do it on purpose that rubs me the wrong way.
taxes are so high in these towns because in the Mid Coast because is a highly compensated, self sustaining , parasitic administrative class that exists there, made up of “City/Town Managers, planning directors, economic development directors, innumerable school administrators etc”. When their mediocrity becomes apparent to the local populace , they simply apply elsewhere and shuffle off down the road to the next unwitting town/city.
It is the school budgets, the property owners can no longer support these hugh school systems. I have
made the suggestion to politicians we need a one percent sales tax to support these schools.
That very idea has been thought of and is in use out West right now and is doing pretty well. It was also supposed to be used here in Maine as a means of taking the load off Mainer’s by shifting a large portion of the tax load onto the tourist and seasonal folk’s and save us full-timer’s from getting the shaft. Bush’s Wall St ‘Christmas Gift’ saw that idea go down the toilet real quick. The only other model like this is in Wyoming where they have a mineral tax on mining (Anyone from Bald Mountain out there ?) and a local lodging, meal and car rental tax in Montana for the same reason. Someone really does need to get out and realize that there is a world out there beyond whay ever world Augusta and LePage live in. There are solution’s. But until Augusta and the StateHouse realize it, well, most of them are gonna be stuck south of the P-Quis Bridge.
Of all the taxes paid by U.S. citizens the property tax is by far the most unfair, and inequitable. Property tax is not assessed on percentage or “ability to pay” (like sales, income and gas tax) it is assessed on what someone MIGHT pay for your home under perfect conditions.
This is simply a way of telling people (who may have owned the land for generations) that they need to move off and let wealthier folks move in. If towns, counties, and states did this by race it would be illegal, but they are free to “discriminate” against full-time employees who make less than summer tourists who want a second home.
We own nothing; We just rent it from the government, and when they want it they just raise taxes above our means to pay.
Taxes are based on the towns budget needs to run another year. Have you attended and voiced an opinion at any of these public meetings?
Yeap Every year.