Unpaid taxes amount to 'cheap loan'

"You can't raise the rate just for developers. You have to raise it for everyone," Kirk said. "Personally, I think the current penalty (2 percent) and the interest (10.25 percent) is pretty stiff."

Altom says some late tax payments — as long as not too many people do it — may actually allow counties to earn more on such money than they could on the other ultra-safe investments they are allowed to make by law.

For example, he said interest paid by the state's Public Treasurer Investment Fund was about 5 percent last year. "That's not a bad earnings rate in this market. But 10.25 percent (on late taxes) is better," again as long as not too many people are late, he said.

And treasurers say delinquency rates are generally low and have been for years. In fact, Richardson said that this year, delinquencies were the lowest he can remember in Salt Lake County.

"We had fewer delinquent parcels at the end of the cycle this year than I could find as far back as I have dependable numbers. We had 51,000 parcels that were delinquent at the end of 2007. In 2006, it was 59,000," he said. He adds that most delinquent taxes are paid quickly, and that very few ever go to tax sale.

The Morning News also found that relatively few public officials were delinquent on taxes this year. In some recent years, scores of public officials were late. But this year, the newspaper found only five who were.

They offer example of innocent oversights or problems that Richardson says causes most late tax payments.

For example, West Bountiful Mayor James Behunin offered a common reason. "We just paid off our mortgage and own our house free and clear. So now we have to pay taxes ourselves, instead of the mortgage company."

He said there was some confusion about the amount owed. His wife sent a check for what they thought was the full amount, but the county notified them that they were $26 short and they ended up on delinquency lists for that — but said he quickly paid it.

State Rep. Steve Sandstrom, R-Orem, said he refinanced his home near the end of 2006, and escrow accounts were messed up. He said double payments were paid for property taxes in 2006, but none were made in 2007 — putting him on the delinquent list temporarily until problems were sorted out.

Lehi City Councilman Johnny Revill said he refinanced his home near the end of 2007. With the late closing on refinancing, his mortgagers also did not pay property tax on time.

Not responding to several Morning News inquiries about why they apparently were on delinquency lists were Santaquin Mayor James E. DeGraffenried and Taylorsville City Councilman Jerry Rechtenbach.

---

E-mail: lee@desnews.com