Montco reports huge boost in delinquent tax collections

Montgomery County’s shift to a new method of collecting delinquent taxes appears to be paying off.

Treasurer Jason Salus reports that collections in the first 50 days of 2013 totaled $5.7 million -- a 400 percent increase over last year.

Montco Treasurer Jason Salus says delinquent tax collections are up 400 percent this year.

In September, the county commissioners approved a resolution to have the county Tax Claim Bureau collect all delinquent taxes on behalf of townships, boroughs and school districts.  The bureau charges each taxpayer a 5 percent collection fee and 1 percent attorney’s fee.

Under the old system, many school districts and municipalities hired outside firms to collect the taxes, and the bureau received nothing for those collections.  County officials argued that the bureau was losing out on millions of dollars to which it was entitled under state law.

The collection figures, which Salus said are preliminary, represent a steep increase in beginning-of-the-year payments.

“We put in financial incentives for people to pay earlier,” Salus said.  One incentive for this year -- fees were not charged until Feb. 15.

Other incentives are more punitive, like the 9 percent interest charge added to delinquent tax bills.  If taxpayers are chronically delinquent, the county can put their property up for sale. 

“We’ve been very candid with folks that the new laws give us the ability to go to sale more quickly,” Salus said.  “People have re-prioritized their bills and are now paying their taxes.”

The new system took effect Jan. 1, but some agencies have opted out – even if that means paying the bureau’s 5 percent fee out of their own budgets.  The holdouts include Pottstown, Abington, Cheltenham and Lower Pottsgrove, and 12 school districts.