Guest Column

What Is Yorktown Doing to Collect $4.5M in Unpaid Taxes?

To the long list of problems and unfinished business the current administration inherited from the previous administration, add the issue of $3.2 million in unpaid taxes—or $4.5 million, when interest and penalties are included. (The numbers are as of May 8 and do not include unpaid taxes for 2017.)

Here are just a few examples of taxes that haven’t been paid.

• A homeowner who owes $346,440 in back taxes and interest dating to 2006. In one month, his outstanding balance increased by $2,045.

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• A developer who purchased three adjoining vacant lots from the town at an auction in 2015 for $11,000 but who the town never required to pay taxes on them dating back to 2009. The parcels now owe $39,740—and the developer has applied for a stormwater permit to build a single-family house on the combined lots.

• The owner of the parking lot used by the now-closed Eddy’s Grillhouse and about to be reopened as a new restaurant. The owner owes $45,290 for 2013-2016. (The building and the parking lot have different owners.) Since the building can’t be used without access to the parking lot, one has to assume that the owner of the parking lot is getting some rental income for the use of his property, money that could be used to pay his back taxes.

• The owners of four properties that have been before the Planning Board over the past year owe a combined total of $312,780. While the property owners, or the developers who have contracts to purchase the properties, are paying their engineers and architects to prepare their site plans, they’re clearly not paying the taxes they owe Yorktown while town employees are spending dozens of hours reviewing their applications.

To his credit, Supervisor Ilan Gilbert attempted to address this issue soon after taking office. At an untelevised work session in January, he proposed a resolution that would have addressed one part of the problem. But when Councilman Ed Lachterman raised an objection that was based on hypotheticals without any supporting documentation, the board dropped the idea without any further discussion. Worse, it showed no interest in exploring alternative options for collecting millions of dollars in unpaid taxes.

Ironically, in what some might call a perverse argument, a former town councilman in the audience pointed out that the board might actually be better off doing nothing—yes, nothing—to collect unpaid taxes because the town “makes money” when property owners are late in paying their taxes. That’s because state law requires the town to charge 12 percent interest, compounded, when the taxes are eventually paid and the interest money becomes a revenue on the town’s balance sheet. And it’s a sizeable revenue that in recent years has totaled more than $900,000 a year.

Of course, when the taxes are not paid—and some never will be paid—there’s no interest payment and Yorktown taxpayers end up the losers because the town will never get reimbursed for the money it laid out to pay the county and school district taxes. And eventually, the fund balance will have to take a hit when the never-to-be-collected unpaid taxes have to be written off.

What can be done to address the problem?

For starters, our elected officials need to make the issue of collecting unpaid taxes a priority. Once that’s done, they need to work with the appropriate department heads to set up a procedure for handling unpaid taxes on a systematic and regular basis. It’s a simple, computerized procedure that could include initially sending out reminder letters (not required by law, but a reasonable courtesy gesture) to initiating foreclosure proceedings as a last resort when all else fails. The possibility of foreclosure often leads to payment.

Next is dealing with permit and development applications. Here, the board should at least take a look at the straightforward two-page North Salem law that says that processing and approving specific types of applications cannot be considered if the property owes the town money.

The North Salem law also includes language that very specifically addresses Councilman Lachterman’s objection to doing anything. His concern is that denying building permits to those with unpaid taxes could be self-defeating as a homeowner may need whatever money he has to improve his property in order to sell it and then pay his unpaid taxes out of the sale proceeds—but the North Salem law includes a very clear waiver provision that permits the Town Board to waive the provisions of the law to prevent undue hardship or an inequitable result. A Yorktown law could include the same provision.

Surely, it’s time the Town Board started a serious discussion on this issue.

Susan Siegel is a former town supervisor (2010-11) and councilwoman (2014-15).

The opinions expressed herein are the writer's alone, and do not reflect the opinions of or anyone who works for is not responsible for the accuracy of any of the information supplied by the writer. Click here to submit a Guest Column.

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