Tax Collection or Tax Seizure?

Common Council passes local law to collect back taxes on delinquent properties.

Arguing that Syracuse could increase vitally-needed tax revenue, Common Councilor Kathleen Joy persuaded a bare majority of her fellow councilors to amend the city’s tax code to make it easier for homeowners to pay back taxes.

“I’d rather be a city of tax collection than tax seizure,” said Joy, contrasting her proposal of allowing people behind in their taxes to pay off the latter through a trust, with the city’s method of seizing tax delinquent property for re-sale.

Photo: Molly Smith
Common Councilors voted in favor of amending the city’s Tax and Assessment Act here in City Hall last Monday. The law is now up for the mayor’s vote.

Although the council voted 5 to 4 for the measure last Monday, Joy’s amendment must go before a public hearing, after which Mayor Stephanie Miner will have ten days to sign or veto the measure.

For those property owners behind on their taxes, Joy contends that the administration would rather sell these properties to the Greater Syracuse Land Bank for virtually no money instead of attempting to collect the back taxes through a tax trust, or monthly repayment agreement.

The trust allows taxpayers to put one-tenth of what the owner owes, with the balance paid off over five years, at 12 percent interest.  Joy said the city is due up to hundreds of thousands of dollars on such tax delinquent properties.

“Why would we forgo the opportunity to collect back taxes knowing we have a land bank to fund and a $12 million deficit?” Joy asked.  “It’s as if the city is saying, ‘We don’t want your money; we’d rather take your property.”

Joy, along with four other councilors who voted in favor of the amendment, said she believes that the current interpretation of the law is unconstitutional and discriminatory. The local tax code reads as follows:

“Agreement and installment payments. No person shall be entitled or permitted to pay such delinquent taxes and assessments in installments as provided above until he shall first have applied for and executed an agreement in writing with the commissioner of finance, upon a uniform standard form to be furnished by the commissioner of finance…”

It is the “uniform standard” that Joy said she believes is not being applied fairly.  As of five months ago, Commissioner of Finance David DelVecchio changed the eligibility requirement for those to apply for the tax trust.  Only those taxpayers behind on taxes who live in their properties may apply for the trust.

"This policy change has been made necessary by the fact that certain tax delinquent owners of real property are using tax trusts as a vehicle to evade their responsibilities,'' DelVecchio wrote in a letter in March to owners of tax-delinquent properties.  The policy change took effect April 15.

However, the Tax Trust Application explicitly states the following:

“This is an application for a Tax Trust Agreement between you the property owner, and the City of Syracuse for the installment repayment of delinquent property taxes.”

Whether that “property owner” lives or does not live in the delinquent property is not specified.

According to the Department of Neighborhood and Business Development, only about 30 percent of Syracuse’s tax delinquent properties are owner-occupied.  That leaves the city with only 30 percent of properties to collect back taxes on, while the great majority is sold to the Land Bank.

The Land Bank, now authorized to enter a second contract with the city, hasn't taken a stance on this issue.  Executive Director Katelyn Wright says that while the goal of Land Bank is to acquire these tax-delinquent properties, it does not take part in how the city deals with the land prior to foreclosure.

“Our focus is on the acquisition of vacant and abandoned properties so that we can stabilize them and return them to productive use, typically via sale to responsible owners will well-vetted redevelopment plans,” Wright said.  “One of the many ways we acquire properties is via purchase from the city subsequent to foreclosure for tax delinquency, but we do not advise the city on their policies related to tax-collection that they undertake prior to foreclosure.”

Councilor Joy said she wants to know why the city would voluntarily relinquish hundreds of thousands of earned tax revenue that eventually goes toward funding the Land Bank.  The mayor’s office as well as the Commissioner of Finance declined to comment.

For now, Mayor Miner will hold a hearing on the law this Tuesday.  She will have 10 days to veto the law, which she is expected to do.  Unless Joy can convince another councilor to vote in favor of the law, it will not pass.  Six votes are required to override a veto.

“Some people just can’t afford the full amount of back taxes but want to remain in their property, an owner, and come up with the money over time to pay it,” Joy said.  “Why should we take that away from them?”

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