In Apr. 19 issue, Russell County News
By Greg Wells, Managing Editor

The payment of 2007 property taxes has become unfairly complicated for many Kentuckians.

"Our state now has several out-of-state investment companies that come into our counties with the sole purpose of purchasing delinquent property tax bills," said Russell County Attorney Mark L. McGaha, whose office handles delinquent property tax collections.

"When the investment companies purchase the bills, that can lead to taxpayers losing not only money in interest and fees, but also their property through foreclosure.

Once the bills are purchased by these companies, it is out of our control as to the fees, etc., that are assessed by these out-of-state investment companies."

Once property tax bills become delinquent, according to Kentucky law, the sheriff must hold a "sale" for the bills.

"Once a delinquent bill is for sale, anyone can purchase it," McGaha said. "These investment companies purchase the high-dollar, high-collection-rate bills during the sale."

McGaha said this is particularly problematic for several reasons.

"First and foremost, this is a consumer protection issue," McGaha said.

"The investment companies prefer that the taxpayer not know about the tax due for some time.

This allows the company to accrue interest at 12 percent annually.

These companies also are known to charge exorbitant attorneys' fees that are the responsibility of the taxpayer.

They many even attempt to foreclose on the property."

To collect delinquent taxes, McGaha said his office sends written notices to those who have neglected to pay.

In addition to the direct problems Russell Countians can face if their tax bills are purchased by an investment company, the community as a whole is harmed as well, according to McGaha.

Because county attorneys receive only $3,000 annually from the state for the operation of their offices, the loss of commissions from delinquent property tax bills is a concern.

"Those lost fees to the local county attorney's office mean we have less money available to offer programs to our communities and less money to prosecute criminals," McGaha said.

"Without commissions from collecting delinquent property taxes, county attorneys would need a huge influx of money from state or local government.

Or, an even worse outcome, prosecution efforts in our counties would diminish, which would threaten the safety of our communities."