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Delinquent Property Tax Reform: Replacing antiquated tax lien sales systems with opportunities for local governments

The issue:

Unpaid property tax liabilities threaten revenue streams for municipal governments across the nation, undercutting mayors’ and managers’ ability to fund even basic public services.  At the same time, the manner in which most governments handle delinquent tax liabilities has not changed in more than a century, with governments typically selling tax liens on the open market. This system often causes problems: governments are typically deprived of the full value of the taxes and fines collected; too often liens on vacant properties are purchased by speculators with little commitment to maintain them or put them back into productive use, causing even greater cost to governments, which are compelled to bear the expense of policing and maintaining these properties; and local governments often don’t have programs in place to prevent owners with financial hardships to meet their tax obligations in a way that keeps them in their homes.


By reforming the delinquent property tax sale process, communities can address tax delinquent properties in ways that capture dollars for local taxpayers, better ensure that property is responsibly maintained and moved back into productive use where possible, and help owners facing financial hardships resolve any problems before getting to the point of losing their home through a tax lien sale.


The tools:

The Center for Community Progress has extensive experience in helping communities assess their tax foreclosure process and come up with more effective solutions. We’ve pioneered the use of alternatives to the antiquated practice of tax lien sales – including the use of tax anticipation notes, public collection systems as an alternative to privatized debt collection, and the redesign of state and local property tax enforcement systems. We have helped make the connections with coordinated strategies including land banks and land banking, vacant property registration ordinances, code enforcement, and other policy and legislative options.


The resources: 

The Center for Community Progress has extensive experience in working with local communities to structure remedies that move tax delinquent properties from potential or actual sources of blight into assets.


Information: We help public entities understand the complex relationships between tax delinquency, collection, and vacant property reuse. We offer a broad range of background information and assistance in drafting new ordinances and programs on the local level; in drafting new statutes and statutory amendments at the state level; and in tailoring model approaches to local conditions.


Education and Advocacy: Community Progress helps municipalities educate constituencies, communicate goals, and build popular support to address the issue of tax lien sales reform through legislative initiatives and policy development. We know how to build knowledge-sharing opportunities – from public forums to region-wide conferences – that help residents, legislators, advocates and the business community understand options and come together as advocates for effective remedies.


Consultation: We help public and private organizations acquire the necessary skills and expertise to structure tax reforms that improve the effectiveness of land use strategies and revitalization efforts for the long-term benefit of community residents. That includes a wide range of capacity building services, based on the needs of local communities, that incorporate best practices and employ new models and cutting edge approaches. We provide support in the legislative arena over the long term, across multiple legislative cycles, and help local governments create policies and procedures to accompany legislative initiatives that maximize civic benefits for local neighborhoods. 



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