Mayor pushes for flexibility on delinquent tax problems

By NATALIE SHERMAN

July 14, 2012 12:00 AM

NEW BEDFORD ? Mayor Jon Mitchell is pressing the city and state to make laws more forgiving to delinquent taxpayers, an effort to forestall problems from the decision to sell the city's tax liability to private investors, who are typically more aggressive about collection.

"Our city's longstanding problem of tax delinquency needs to be addressed in a thoughtful way that takes account of the changed financial and economic circumstances facing property owners," he wrote in a letter to the City Council Wednesday.

In the letter, Mitchell asked the council to change the city ordinance to allow New Bedford to forgive after two years 40 percent of the interest owed on unpaid taxes ? about $15 million citywide. He also asked the council to extend payment plans, which would give some taxpayers access to deferrals or new assessments of their properties, by one year for commercial and residential properties, to three and four years respectively.

"We are all aware of the difficult times that have faced property owners, both commercial and residential, recently," he wrote about the policies, which he described as a "Tax Fairness Initiative." "lt is a modest but important step toward remedying the situation and fairly and equitably dealing with all taxpayers in the collection of back taxes."

At-Large Councilor David Alves said he supports city efforts to work with delinquent taxpayers, but he's not sure the remedies Mitchell proposed will help constituents once private companies own the liens.

"His argument I don't think addresses some of the constituent concerns that I have and should have as a city councilor, who gets elected by serving my people instead of selling them off," he said.

The city has about $15 million in unpaid taxes, some on accounts that stretch back more than 20 years, said city tax title attorney Blair Bailey. About half of that amount is interest, due to a state-mandated 16 percent annual penalty rate, he said.

The mayor plans to lobby legislators to change the state-mandated 16 percent interest rate on unpaid taxes, said chief policy adviser Neil Mello.

"It is the mayor's position and the administration's position that it's draconian and not constructive," he said. "Right now that rate is so excessive that it's an incentive to run from the problems."

Sen. Mark C. W. Montigny, D-New Bedford, said he supports a change in the interest rate, which is 2 percent lower than nearby Connecticut and New Hampshire.

"The interest rate is not defensible. It's government thievery," he said. "I think the city should have significant discretion to lower the burden and dispose of these deeds. It doesn't serve anybody to have these restrictions. ... It holds up the works of the city."

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Source: http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20120714/NEWS/207140343/-1/rss01

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