NORWICH – With help from Chenango County, the school districts serving its youth and the villages within its borders are made whole each year when the amount of taxes collected falls short of the amount billed.
The Chenango County Board of Supervisors adopted resolutions earlier this week to cover the districts’ and villages’ unpaid taxes. The action authorizes the county tax department to relevy the unpaid amounts, to pay the entities up front, and – at the end of four years – to conduct a property tax sale for recovering whatever is left in arrears by then, plus penalties.
The total amount due for 2010/2011/2012 (depending on the tax billing cycle) is a bit more than $4 million, of which $359,000 represents unpaid City of Norwich School taxes. The county will compensate the districts this month and the villages by April of next year.
At Monday’s board meeting, Preston Supervisor Peter C. Flanagan asked for clarification about which county surplus account was being tapped for the annual obligation, whether the amount was growing each year and whether the county should budget or set aside money in a separate account to cover it.
Government Accounting Standards Board rules preclude budgeting for the amount, according to Deputy County Treasurer Ardean Young. GASB is currently the source of generally accepted accounting principles used by state and local governments in the United States.
Young said counties often have to borrow for the amount each year, but not Chenango. He directed Flanagan and other members of the board to an unappropriated surplus account with enough cash flow in it to cover the annual payout.
“We’re perpetually carrying it ... it’s set up as a liability outside of the fund balance,” he said.
In fact, the county has a history of recovering more than the liability. The county recovered $250,000 in this year’s sale above what was owed, Treasurer William C. Craine said.
“We’ve done all right so far,” he said.
Moreover, the amount of unpaid school taxes is only up 2 percent this year as compared to 10 percent in 2010. And, after the four year period, there are also fewer properties ending up in the tax sale (about 25 less this year than in 2010), Craine said.
Also this week, the county board adopted a resolution to redefine the classification of funds balances into five new classes next year, per GASB regulations. The current classes and amounts are as follows:
• Reserves for encumbrances: $1.3 million
• Statutory reserves: $700,000
• Unreserved appropriated $4.3 million
• Unreserved unappropriated $18.6 million
The top 10 municipalities with the most uncollected school taxes:
• Greene $467,517
