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By Jennifer Learn-Andes
A steady stream of Luzerne County property owners appeared at the courthouse this week to pay their back taxes so they wouldn’t be hit with a new 5-percent penalty and liens.
Northeast Revenue Service LLC, the county’s tax claim operator, encouraged taxing bodies to authorize liens and an additional 5-percent penalty, predicting the measures will prompt more property owners to settle their debts sooner.
Some county property owners habitually wait until the period right before a back-tax auction to pay, and properties don’t go to back-tax auction until taxes are two years overdue, officials have said.
Before the new penalties, which take effect July 1, county property owners were charged 9 percent interest annually on delinquent taxes, which would amount to $90 on a debt of $1,000. The new 5-percent would tack on another $50 for county taxes.
County council approved the new penalty and lien plan late last year, followed by many school districts and municipalities, said Northeast Revenue head John Rodgers.
Long waits
The rush of payers resulted in long lines in the courthouse rotunda this week, with some property owners waiting an hour. The tax claim office called in reinforcements to process customers, and workers stayed past 5 p.m. Tuesday so everyone in the building by 4:30 p.m. had an opportunity to pay. Rodgers said. Some phone lines went unanswered Tuesday because all workers were helping customers, he said, noting mailed payments postmarked by Tuesday would be accepted with no additional penalties or liens.
Rodgers said he is preparing a report on the total back taxes collected through June 30.
Liens are public recordings of debt attached to a property. They also allow taxing bodies to pursue sheriff sales of properties as soon as six months instead of waiting two years for the traditional back-tax auctions, though it’s unclear if taxing bodies will proceed with sheriff sales that are usually associated with mortgage foreclosures.
The property owners also must pay the $35.50 lien filing fee to the county, Northeast Revenue said.
Rodgers said the liens are ready to be filed, though his office will wait until more than 30 “hardship” requests are processed under another new program adopted by county council at Northeast Revenue’s urging.
That program, which allows various forms of deferred payment, is for income-eligible property owners at least 65 years old or property owners under 65 who are experiencing a significant emergency situation preventing them from paying the debt, such as job loss or an illness, he said.
Installment payments
All property owners also are eligible for installment payments — 25 percent down, the rest repaid within a year — if they haven’t defaulted on a prior repayment plan in three years, according to state law.
A total of 10,000 county properties typically end up in delinquency annually, and Rodgers said the 9-percent interest already added on wasn’t enough of a deterrent to some property owners.
The additional 5-percent penalty is allowed by law to cover collection costs provided by Northeast Revenue, which are currently paid by school districts and municipalities, Rodgers said.
With the change, school districts and municipalities that opt to participate won’t have to continue covering the 5 percent, he said.
The county’s payment of the collection fee had been waived as part of its agreement with Northeast Revenue, and the county now will receive the additional 5 percent, which was estimated to total $250,000 in the county’s 2015 budget, officials said.
Several property owners waiting in line Tuesday complained about the tax burden and their financial struggles, though a few accepted blame for not paying closer attention to their unpaid bills.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.