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Many Maine towns, cities report more residents paying off tax liens

Posted Jan. 20, 2013, at 9:08 a.m.

In Lewiston, property tax liens are down and property foreclosures for nonpayment of taxes are expected to decline in 2013.

In Sabattus, property foreclosures are down markedly: Sixteen in 2011. Four in 2012.

In Farmington, liens are steady but foreclosures up, some of that property swamp land. The town will work with owners and hope some can pay.

Some likely will.

In what may be a sign of a slowly improving economy, some towns report more people paying off their tax liens.

In June 2011, Lewiston closed its books with 616 outstanding liens for back property taxes. When those liens matured in December 2012, 111 properties automatically foreclosed, Tax Collector Nancy Mennealy said. The rest had caught up or started payments.

In June 2012, the city counted 542 liens. Mennealy expects fewer than 100 to foreclose this December.

In Rumford, the town had 211 liens in 2011, 189 in 2012, according to the town clerk.

In Poland, liens are up, from about 145 a year to 157 in 2012, Town Manager Rosemary Roy said. For the first time, Poland has opted to sell its foreclosed properties through a real estate agent instead of putting them out to bid.

Sabattus Town Manager Andrew Gilmore said last year his town offered additional resources to taxpayers who received lien notices: This is how to ask for a poverty abatement. This is how to set up a payment plan. He credited a turning economy and that extra outreach for the steep drop in foreclosures there.

Liens were down in Farmington, 209 in 2012 versus 217 in 2011. Tax foreclosures were up, from an average of seven to 22 in 2012, Town Manager Richard Davis said.

“As onerous as property taxes are for some people, that’s what is required to operate a municipality,” he said. “Everyone is of course expected to pay their fair share. There is a statutory lien process we follow. We don’t have a choice in it. Some people seem to think we do, but it’s the law.”

Towns’ mixed experience — some figures up, some down — make sense as the housing market rights itself, said Charlie Colgan, former state economist and a professor at the University of Southern Maine’s Muskie School of Public Service.

Ground-level data can be hard to read, he said.

One measure Colgan has studied: In 2009, Maine gave out 9,000 building permits for housing units. In 2012, that dropped to 3,000.

He has forecast 3,500 to 3,600 permits this year.

Because of last year’s poor growth, this spring could create some challenges for Maine municipalities that have historically relied on new housing construction to add value to the tax base, Colgan said.

“Now you’ve got little in the way of new construction, prices have been stagnant for several years and in some towns there’s been many more foreclosures than new permits,” he said. “For a lot of towns it will be [tough]. Towns are facing a revenue pinch overall that is very unusual for them.”

Which may make property tax collection all the more important.

In Farmington, people have two weeks left to get a late-but-paid asterisk next to their names in the town report.

“For myself and my parents’ generations it was absolutely shuddering to think that your name would be listed in the town report for taxes,” said Stephan Bunker, chairman of the Farmington Board of Selectmen and new president of the Maine Municipal Association.

“It would just be the ultimate insult,” he said. “For some people, I think that’s a bit of an emphasis to try to get your financial house in order with the town. For others, it seems that they are perpetually [on the list].”

 

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