Friday, December 6, 2002

Court Orders Fulton County Tax Commissioner to Sell Tax Liens

By Arthur E. Ferdinand
Fulton County Tax Commissioner

On November 12, 2002, Fulton County Superior Court Judge Jerry Baxter ruled against Fulton County in the matter of the sale of tax liens. Consequently, as Fulton County Tax Commissioner I am under a court order to sell tax liens to anyone making such a demand or face contempt charges.

Laws enacted by the Georgia General Assembly provide the framework Tax Commissioners must use to carry out their responsibilities of collecting taxes.

During the 2002 legislative session, legislators alarmed with the usurious profits reaped by investors resulting from tax foreclosures took steps to make it less costly for taxpayers to redeem property after foreclosure. Of particular interest to legislators was the plight of the elderly on limited income.

To address these issues, the legislative body repealed the statute governing transfers of liens, Official Code of Georgia Section 48-3-19, in its entirety with the intent of reversing the indiscretions the statute fostered, and reducing the financial incentives attracting investors to purchase tax liens.

Upon the governor's signing of the bill, I immediately ceased the practice of lien sales. In place of lien sales, we developed a plan to renew the practice of non-judicial foreclosure, a practice I ceased during my first month in office in 1997.

To date I have not been presented with an example of an elderly citizen losing a home due to a tax lien I have sold since taking office in 1997. In Fulton County, there is a higher payment rate among the elderly than the rest of the general population, and those unable to pay in a lump sum are now given payment plans.

Official Code of Georgia Section 9-13-36, permitting lien sales, survived the 2002 legislative session. My refusal to sell liens, in keeping with the legislative intent, resulted in a lawsuit filed against me in Fulton County Superior Court. On the basis of this statute, Judge Baxter made his ruling that as Tax Commissioner I must sell liens when presented with a demand.

This surviving statute does not require notification to taxpayers prior to tax liens transfer. To address this deficiency in the surviving law, my office mailed 39,000 courtesy letters to delinquent taxpayers alerting them of the court ruling, and encouraging prompt payment to avoid lien transfer.

Fulton County is Georgia's largest and most populous county, with a tax roll more than double that of any other county in the State. The scale of operation of our tax office in many instances calls for a different business model than smaller counties in order to operate efficiently and fulfill our fiscal responsibility to the governing authorities.

The 2002 tax revenue digest of the DeKalb Tax Commissioner's office is $450 million compared to the $1.4 billion of the Fulton Tax Commissioner's office. You simply don't run the Exxon Corporation with the same processes used to run an Exxon gas station.

Since taking office in 1997, we have worked within the framework of the tax laws to create an effective operation of continuous improvement to yield a collection rate of over 99 percent while reducing delinquent taxes from a high of $208 million dollars to less than $40 million by year's end.

Governing authorities require a prescribed revenue base to provide essential services: fire protection, public safety, education for our children and salaries for teachers, senior facilities for our elderly, parks and the arts for quality of life, roads, neighborhood sidewalks, and health facilities for our wellness. A greater tax burden falls on fewer taxpayers when scofflaws don't pay their fair share.

Tax collecting is a lonely business and by no means a popularity contest. As Tax Commissioner, I do not get invitations to many parties.