Tax Sale: A Delicate Balance Maryland Gets Right

Today at the second meeting of the Task Force to Study Tax Sales in Maryland, county tax sale and public works experts joined representatives from the Maryland Municipal League (MML) and Washington Suburban Sanitary Commission (WSSC) to testify on the importance of the tax sale process, primarily for collecting local government tax and fee revenues, and secondarily, as a tool to combat blight.

The following individuals provided testimony about how – and why – the process works for the collection of overdue taxes and water and sewer bills:

  • Candace Donoho, Director, Government Relations, MML
  • Cheryl Lewis, Oxford Town Administrator
  • Jim DiPietro, Deputy Director, Bureau of Utility Operations, Anne Arundel Department of Public Works
  • Karyn Riley, Director, Intergovernmental Relations, WSSC
  • Michael Coveyou, Chief, Division of Treasury, Montgomery County Department of Finance
  • Julie Day, Chief of Staff, Baltimore Housing
  • Linda Watts, Assistant Director of Finance, Howard County
  • Helen Shomberg, Assistant Controller, Anne Arundel County
  • Darcy Good, Tax Billing Manager, Anne Arundel County

Additionally, Julie Day provided detailed testimony about how Baltimore City uses tax sale procedures to combat blight and facilitate community development. Karen Riley provided details about the issues inherent in attempting to collect overdue water bills without lien authority.

From MACo’s testimony:

Maryland’s tax sale process effectively enables fair collection of local government revenues, including those due to municipalities, at an efficient cost to taxpayers. In most cases, the mere notice of a property’s eligibility for tax sale is followed by prompt payment of overdue charges. For properties that do enter tax sale, a substantial window of time exists before foreclosure may commence. Most importantly, counties rely on tax sale to keep revenue systems fair. Allowing bills for county services to go unpaid depletes resources for vital public services, and extends fiscal pressure to those taxpayers who pay sufficiently and on time.

The process proves just as necessary for collecting payment on utility liens. If delinquent water and wastewater accountholders are not held responsible for covering their fair share of supporting vital infrastructure, counties must raise rates on paying users, defer imperative maintenance, or both. …

Counties welcome the opportunity to work with this task force to further refine the process, balancing the interests of property owners, investors, and local governments. Counties respectfully request that this task force consider their need to collect revenues to fund essential public services fairly and efficiently when evaluating the many interests and needs involved in the process.

Tax sale investors provided similar testimony. Pro bono attorneys representing low income homeowners in tax sales provided advice on how to better protect their clients. Suggestions include providing explanations of the tax sale language in plain language, and authorizing waivers of estate fees and costs for small and regular estates for low-income families, to provide greater access for heirs to transfer property to their name.

The Task Force plans to convene at least two more times before the 2018 session commences.