I asked Waukesha City Treasurer, Thomas Neill two weeks ago about how tax collections were holding up.
He wrote back:
Amount of real estate billed for 2007 (all taxing districts) $111,506,208. Amount turned over to the County on 7/31/08 was $773,879 (they make us whole and collect from that point on).
I do not have data readily available from prior years, but the County Treasurer might. I believe the amount uncollected from year to year is pretty consistent!
Background: The City of Waukesha sends out a tax bill that bundles together the bills for all the local taxing authorities--County Govt., WCTC, School District and Municipality. Same procedure for each city, town and village in Waukesha County.
Anyone who has not paid in full by July 31 is delinquent. The practice, embedded in State Law (see Wisconsin Statutes 74.57) is that the County Treasurer receives all the money collected by the end of July and disburses the amounts to each taxing authority. The County sends the full amount of the budgeted and assessed taxes to the City of Waukesha and all the others, even though some taxes are delinquent. That's what Neil meant by "...they make us whole....".
Tax collections on the late payers becomes the task of the County Treasurer. Because the penalties and interest on unpaid taxes are stiff, a lot of delinquent taxes get paid fairly quickly--to avoid further financial loss. And the Treasurer keeps the penalty money to finance the debt-collection work.
Our elected County Treasurer, Pam Reeves, provided some more information: once all the tax-supported entities had been "made whole" out of county funds (that is, they received monies equal to the amount levied by each taxing authority) she computes how much still has to be wrung out of the tax deadbeats. The amount of unpaid taxes for 2008 budget year is $9,762,678.34. And that's reported to the County Board, as displayed above.
So far, everything seems to be proceeding as expected. What Reeves showed me that I didn't expect is the large increase both in the number of delinquencies and in the aggregate total of taxes that are delinquent. Reeves, thoughtfully, penciled in the percent increase for 2007 over 2006. That's a big jump, almost 30 percent. And 2006 was 16 percent higher than the previous year, which was 13 percent higher than the year before that.
Looks like a trend. Relax, gentle reader; it isn't ugly...yet. But if the trend continues it will, indeed, be ugly.
As foreclosures increase, there will be more delinquencies...
As houses get sold for a fraction of their assessed value in foreclosure actions, the tax assessor's valuations will--by law--decrease...
As the aggregate assessed value of real estate in any given municipality decreases, the tax burden will fall on diminishing tax base...
As the tax base diminishes, the tax rate per thousand of assessed value will increase...
The key word is exponential.
And the last word on "exponential" is the ineffable wisdom of Dr Albert Bartlett of the University of Colorado at Boulder:
"The greatest shortcoming of the human race is our inability to understand the exponential function."