Treasurer Says Geauga Tax Collections to be Envied
Some Ohio counties are struggling with tax collections because of the economy, but not Geauga County. Treasurer Chris Hitchcock said Geauga is "to be…
Some Ohio counties are struggling with tax collections because of the economy, but not Geauga County.
Treasurer Chris Hitchcock said Geauga is “to be envied” by other counties because of its successful tax collections.
“Given the less than stellar economy, our county, from a real estate tax collection perspective, is strong, excep-tionally strong,” Hitchcock said in his report to Geauga County Commissioners last Thursday.
Local tax collections are up while delinquencies are down based on a 2006-2011 study, he said.
The treasurer said he did the study to disprove a “disgruntled” township trustee’s claim that tax collections were caused by the poor economy.
Hitchcock did not identify the trustee, but said he felt the assertion meant the treasurer’s office was not doing its job.
Hitchcock’s efforts to prove otherwise resulted in a county-wide tax collection review from what had begun as an investigation of a single township’s problem.
Based on his study, Hitchcock said total 2011 county tax collections, which were paid in 2012, were actually 100.5 percent because of payment of previous delinquencies.
“General thinking would expect tax collections to follow the economy, when the economy faulters, tax collections fall,” Hitchcock said in his report. “This report proves that theory wrong, at least when applied to Geauga County.”
When the economy has declined, county property taxpayers have responded by paying their current taxes and delinquent taxes in record amounts, he added.
In 2012, nearly $158 million in property taxes were collected, the most ever paid, Hitchcock said
In addition, more than $5.7 million in delinquent taxes were collected last year, the most in the county’s history, which means property taxpayers paid more than was actually due, Hitchcock said.
Not only is this unusual in government accounting circumstances, it usually can’t be sustained, but not in Geauga County’s case, he added.
His study revealed tax collections have increased from $148 million in 2006 to $164 million in 2011.
Delinquent Real Estate Taxes
Hitchcock said delinquencies have seesawed with the economy, although they never dropped below 95.8 percent and, by 2011, increased to 97 percent.
“That is a great indicator of economic strength,” Hitchcock added.
There are two kinds of delinquencies, current delinquencies, or taxpayers who did not pay their current taxes, and total delinquencies, taxpayers with current delinquencies and prior delinquencies.
In 2006, total delinquencies were $6.6 million, or 4.4 percent of total tax charges, but jumped to $12.1 million by 2009, an 83 percent increase, he said.
“Given the sour economy, this magnitude of increase is not surprising,” Hitchcock said.
From 2009 to 2011, however, total tax delinquencies actually decreased by almost $2 million, from $12.06 million to $10.14 million, a 16 percent decrease.
This brought the 2011 ratio of total delinquencies to total tax charges to 6.2 percent, the lowest since 2007, he said.
In the ensuing two years, total delinquencies have fallen to $10.1 million, a 17 percent drop to 6.2 percent of the total taxes collected, Hitchcock said.
“Declining total tax delinquencies in a challenging economy is not to be expected,” Hitchcock said. “The expec-tation would be just the opposite, but not so in Geauga County.”
School Districts
Because school districts are among the recipients of real estate taxes, the treasurer said his analysis breaks down the data by each of the county’s seven school districts.
Total collections for all seven districts increased from more than $88.3 million in 2006 to more than $93.5 million in 2011.
While the amounts collected vary, the 2011 collection rates were higher than 100 percent in five of the seven school districts, which Hitchcock said is rare.
These schools districts are Cardinal, 100.3 percent; Chardon, 100.8 percent; and Kenston and West Geauga, both 100.7 percent.
The two school districts that didn’t receive 100 percent tax collection, Ledgemont and Newbury, collected 99.2 percent and 99.4 percent, respectively.
Although most school districts would welcome a 99 percent collection rate, “sustaining rates above 100 percent just isn’t possible,” Hitchcock said.
County Comparison
With an overall delinquency rate of 6.8 percent, Geauga County ranks 24th in real estate tax delinquencies, while Mercer County on the Indiana border had a 3.6 percent delinquency rate, lowest in Ohio, according to the Ohio Department of Taxation.
In comparison, neighboring Cuyahoga County’s nonpayment rate is 18.7 percent, while Lake County’s is 7.8 percent and the state average is 10.8 percent, Hitchcock said.
In conclusion, Hitchcock said an overwhelming number of Geauga County residents pay their taxes on time.
In addition, nearly every municipality and every school district is being funded at or in excess of 98 percent of the current collection, which is extraordinarily high, he said.
“The bottom line: Considering the sorry economy from a real estate tax collection perspective, Geauga County is an amazing place,” Hitchcock said.
