Tax returns flow into city coffers
Many taxpayers prefer making payments in person, getting a receipt
It’s easier to drop an envelope in the mail than fighting for a parking space and standing in line to pay taxes, but the numbers would suggest that some taxpayers want receipts and are willing to wait to get them.
David Olsen, city treasurer and interim tax collector, reported Friday that, from June 30 to July 31, the city received $23.9 million in tax payments at the collector’s office in the City Hall Annex. During the same period, $14.2 million was received in Boston at the city’s lock box.
The lock box system was implemented last year so that payments would be deposited as soon as they are received. With the influx of payments at quarterly due dates, the city collector’s office frequently didn’t make the deposits for weeks, thereby denying the city use of the funds and the taxpayer reconciliation for their checking accounts.
“What bothered me was that checks were sitting around,” said Olsen.
With the lockbox, Olsen said, “deposits are high,” and the system of collections was running smoothly.
But that didn’t appear to be the case this spring, when the city issued more than 25,000 tax delinquency letters to taxpayers. Many of the notices were for small amounts resulting from interest on late payments that had been compounded. In many cases, these amounts were not reflected in current notices, so the delinquencies came as a surprise.
Also, with the lockbox, the city eliminated a practice of a grace period of about two weeks for late quarterly payments. When compiling the list of delinquencies, the city’s computer program did not account for a grace period pre-dating the lockbox.
“There was a lot of stuff [unresolved tax issues] sitting out there,” said Olsen.
The city collected $4 million in delinquencies and late payment interest charges.
While the city allows for quarterly tax payments, Olsen said he is seeing a number of people paying their full tax bills at this point. Smaller payments – amounts of $100 or less that frequently apply to motor vehicles – are to be paid in full on July 15.
“Sometimes there’s a bug or two,” City Finance Director Ernest Zmyslinski said of the lockbox and tax collections to date. “It seems to be working well,” he said, adding that lines outside the annex have disappeared. Zmyslinski said a redesign of the tax bill has helped avoid confusion.
As for the flow of tax payments, and the ability of the city to meet payroll and other requirements, he said, “We haven’t had cash flow issues for a number of years.”
A question about the performance of tax collections was raised prior to the July 15 payment deadline, when a taxpayer brought four city utility payment envelopes to the Beacon. Each contained a check written by the same company for utility payments on different properties. The checks were dated April 27, 2012.
The taxpayer said she had picked up the unsealed envelopes from a stack in the entryway to the annex with the thought of using them to pay her own bills. When she discovered the checks, she tried calling the company that issued the checks. When she didn’t reach them, she brought the envelopes to the Beacon.
A search of the records found that the payments had been made and recorded more than a month later, back in 2012.
On Friday, Olsen said there is no logical explanation of how the checks ended up where they did. He said he knew of no similar situation before or since.
Olsen reminded taxpayers to separate their property tax payments from payments for utilities. Likewise, he asked that when making a single payment for multiple tax bills, that information on what is being paid for is included.
Olsen said the city is preparing for an Aug. 28 tax sale.
Going forward, he aims to have the tax earlier in the year, as well as separate those properties listed for sale because of unpaid taxes from those where water and sewer fees haven’t been paid. There would be separate sales. He said the number of unpaid utility bills is climbing, whereas unpaid taxes are declining because banks are escrowing taxes.
He said tax sales for utilities are especially attractive to those speculators frequenting the sales because they know the mortgage companies will redeem them rather than lose the property over an unpaid utility bill.
“They can get 16 percent on their money,” Olsen said of the buyers. “That’s not bad money.”