A differing view on Rumford’s interest rate on unpaid taxes

To the Editor:

Recently, Rick Green’s letter to the editor describing unpaid taxes as low interest, unsecured loans was brought to my attention. You don’t need to be a rocket scientist to understand that Mr. Green’s comparisons are just plain wrong.

The 24.5 mil rate on the 2014-2015 tax bills amounts to a 2% annual “rental” charged for the taxpayer to simply own property in Rumford. On a generally accepted standard average home value of $100,000 (I believe there are few if any properties in Rumford that would fetch $100,000 in a sale), that is an annual “rent” of $2,450 for just this one year, $204.17 per month..

On top of that 2% “rent,” the town is charging any past due accounts interest at a scorching, nothing but greed driven 7%, more than twice what it is paying for anyone who pays in full in advance of the due date, excluding those who get suckered into joining Mr. Bourret’s “tax club” which pays 0% interest to the early paying taxpayer while the town earns interest from investing the early payments!

If you want to break-up your payments over the course of the year and aren’t escrowing your payments with the bank as part of your mortgage, an escrow that pays you interest, Oxford Federal Credit Union, Franklin Savings and other institutions have interest paying tax clubs where you will benefit from making those monthly deposits the same as you do on a Christmas Club and other such offerings of these fine institutions.

Mr. Green is correct, you do not have to “fill out an application” to be delinquent on your taxes and be charged 7% (voters rejected 7% at town meeting setting the rate at 3%), because the town already has you by the cahoenees. First of all, you are being charged rent at 2%, next you are being charged interest more than double what you would be paid if you paid your entire bill before the first due date, and with a 0% paid on the “club” well, that difference is ad infinity.

Most importantly, the town already has a “lock” on your property! If you do not have your taxes paid in full come the next fiscal year, that 2% “rent” plus 7% interest becomes a lien preventing you from having clear title to your property and encumbering any sale or enjoyment thereof. Don’t get the balance cleared up shortly thereafter and the town is going to file to take possession of your property with that 2% “rent” and 7% interest swallowing up 100% of your property value. In effect, each of us has unwillingly (probably unwittingly) put up 100% of our property value as “collateral” on a loan that is only 2% of the value.

Mr. Green, some in town didn’t think that 3% is what the town should charge on unpaid taxes, a majority of the 280 people at town meeting know 3% is what the town should charge on unpaid taxes and they said so by first rejecting the 7% then by passing the 3%. “How many people in town would think that it would be a good deal to simply not pay their taxes?” you ask. Only those who simply do not have the financial resources to pay the highest property tax rates on property that is grossly overvalued.

Most people recognize that if they don’t pay-up and fast, the price jumps to $1000 per $1000 valuation, in the process they forfeit their home or business. There is nothing “sweet,” low interest, or unsecured about this. It is just one more example of town leadership and employees seeking to punish the voters standing their ground and demanding cuts in the town’s budgets.

Furthermore, 7% is the maximum allowed by state law. The reason some towns are charging a 7% interest rate is purely greedy and punitive to strapped residents and businesses that are in such economic distress because of the conduct, habits, and practices of the leadership of those towns.

No, Mr. Green, I can not imagine NewPage deciding not paying their taxes because the “interest” being charged on their “rent” is “only” 3%. I can not imagine NewPage, which is already struggling with operating costs that exceed revenues and values it’s assets adding to operating costs and encumbering or forfeiting assets by not paying their taxes in a timely way.

In fact, for the last two cycles we have seen NewPage pre-pay sizable amounts to cover the town’s leadership’s refusal to get their acts together and present a reasonable budget, complete the valuations necessary to determine the town’s valuation, and get the tax bills out on time. NewPage in effect is paying on a bill that doesn’t even exist yet.

No, Mr. Green, I can’t see the mill paying more than they owe with the addition of interest and certainly can’t see the mill putting their assets in a position of having a lien placed on those assets, obliterating their clear title, and preventing a sale, say the sale to Verso scheduled to close in the second half of 2014.

I, Mr. Green see it as even less likely that a senior citizen residing in the home that is their “nest egg,” the home they were supposed to be able to sell to use the proceeds from to enjoy retirement, perhaps in a warmer climate, only to find it unsaleable because it is located in Rumford, ME are going to risk the only asset they have if they have a choice. Many simply don’t realize they do have a choice.

So Mr. Green, I’d say it is long past time our impoverished citizens where made aware, they do have a choice, one that could potentially not only relieve them of this usurious 7% interest but potentially the entire “rent” as well. The secret of “hardship” relief shall be no more. If you own property in Rumford, and just don’t have the income to pay your property tax bill, go to the town manager’s office and fill out a by law, confidential application for a hardship abatement. There is no reason for you to lose your home you worked so hard for to the town or to pay interest on “rent” you can’t pay.

If the creator of the town’s “tax club” really cared about the town and the people in it, he would have set an interest rate to pay on deposits equal to the interest to be charged on delinquent taxes. At the very least, a creator of such a scheme with a conscience would pay the same rate of interest as banks and credit unions offering the same service, after all, the “club” will be generating return on investment of those funds which, instead of going to the taxpayer, will be going to further pad spending.

I call this scheme not only punitive, but usurious. It is important for the people of the town to pay fair taxes. It is important for the leadership to implement policies and practices that produce budgets that are reasonable. It is important for every town employee to deliver on what they are being paid to do.

Combined, the leadership and employees have a responsibility to perform in ways that demonstrate responsibility and reasonableness, not in greedy, punitive or usurious ways.

Candice Anne Casey