In 1994, tax lien sales became

big business in Fulton County when former Chairman Mitch Skandalakis and

former Mayor Bill Campbell sold $27,665,615.53 in delinquent taxes to

National Tax Funding, including liens of the elderly.

In an 08-18-1994 editorial

county" the editorial board wrote "Since the purpose is to collect

taxes owed, we say: Go for it. Nobody likes paying taxes, but it's an

affront to responsible taxpayers that delinquents exist. Salting the wound,

almost 75 percent of tax deadbeats are non-residents, living outside the

city and county. Equity aside, selling off tax liens makes sense: 90 cents

in the hand today will be worth more than $1 paid years in the future

- if that dollar is collected at all."

With this infusion of much

needed tax revenue, Skandalakis and Campbell were hailed as forward thinkers.

When I became Tax Commissioner in 1997 the transfer of liens continued,

but liens of senior citizens were excluded.

Except for two well-publicized

cases of fiscal mismanagement, the cities of Atlanta and East Point, none

of Fulton County's municipalities or school boards has experienced tax

shortages during my tenure, as the tax collection rate in Fulton County

soared from a state low 90% to a state high 99%.

Due to the county's high collection

rate during my tenure, the millage rate declined steadily to control tax

increases even as county executives approved the construction of capital

improvement projects: four multi-purpose senior centers, a world-class

natatorium, and several libraries and schools.

The fiscal good fortune of

Fulton County and its municipalities is due in part to tax lien sales.

Selling tax liens is not a

tax commissioner's policy, and State laws governing lien sales make no

distinction between whose liens can or cannot be purchased.

Tax commissioners do not have

the authority or luxury of creating distinctions where none are legislated.

Nonetheless, in 2002, tax lien sales became a political lightning rod

fueled by misinformation regarding the nature of lien sales, a single

case of a perennially tax delinquent absentee owner whose property was

foreclosed, and the backing of a legislator whose business was also chronically

delinquent in paying taxes.

The 2002 Georgia Assembly enacted

legislation that struck down a state statute that allowed tax lien sales.

However, an overlooked state statute allowing lien sales survived. It

is one of the few legislated mechanisms for collecting property taxes

from those who do not pay.

On the basis of this surviving

statute, Fulton County Superior Court Judge Jerry Baxter entered a ruling

on November 12, 2002, ordering me to sell tax liens on demand.

The case repeatedly referenced

in the Georgia Assembly was that of Ms. Bailey, a Paulding County resident

who did not pay taxes on investment property she owns in Fulton County

at 1619 Olympian Way SW.

According to Fulton County

records, liens on her property were sold each year since 1993, after she

purchased the property on August 7, 1992. Failure to also pay her tax

lien holder resulted in foreclosure. Based on then existing law, the redemption

cost for her property was significantly higher than the underlying lien

value.

She turned to Attorney Glenn

Richardson for help. Also a State Legislator, Richardson found an ally

in State Representative Douglas Dean to enact legislation prohibiting

tax lien sales.

After Ms. Bailey redeemed

her property, her tax lien was once again sold for not paying 2001 Fulton

County taxes. Since then Ms. Bailey's 2002 tax lien was also sold for

non-payment of taxes.

While Ms. Bailey enjoys her

residence in Paulding County, Fulton County taxpayers pay taxes to provide

services at her Fulton County investment property.

Commercial property owners

who are delinquent in paying taxes would benefit most from the prohibition

of tax lien sales. On December 6, 2002 Vesta Holdings transacted a typical

purchase of delinquent tax liens on 13,531 properties totaling $35,426,940.64.

Of this amount, 22 percent or $ 7,881,644.06 was from homesteaded (owner

occupied) properties, while 78 percent or $27,545,296.58 was from commercial

properties.

Commercial residential properties

accounted for half of the lien sale's value, $17,890,129.00. In a 08-18-1994

article Staff

Writer David Pendered for the

AJC noted: more than a third of the available pool of tax liens is for

rental properties where the owner lives off-site . Rental

property owners reap the benefits of rental income and, based on the County

Marshall's eviction schedules, generally do not tolerate late rent payments.

Interestingly, liens on properties

valued over $100,000 accounted for 81% or $28,802,070.23 of the lien sale

amount, whereas liens on properties valued at $100,000 or less, including

vacant land, amounted to 19% or $6,624,870.41.

None of the liens in the Vesta

Holdings purchase belonged to the elderly. Vesta Holdings does not purchase

the liens of seniors. It makes for bad politics with low financial returns.

This policy has been in effect since 1997.

Despite allegations to the

contrary, no one has produced a single legitimate example of an elderly

resident whose tax lien has been sold during my six years in office. Fulton

County has a higher payment rate among the elderly than for the general

population, and those unable to pay in a lump sum are offered customized

payment plans. Close to a hundred such plans are now in effect.

The major beneficiaries of

the lien sale to Vesta Holdings were: Fulton County $12,555,737.24; Fulton

County Board of Education $7,871,226.32; City of Atlanta $4,787,158.08;

and Atlanta Board of Education $9,380,922.76.

The 78 percent commercial composition

of the tax lien sale to Vesta Holdings is typical. The case of Ms. Bailey,

a delinquent non-resident absentee owner, is far from isolated. That the

elderly are already protected is fact. Cash-strapped governments benefit

from immediate use of tax revenues generated through tax lien sales. What

then is the motivation to outlaw lien sales? Who profits? Is it to allow

commercial owners to go years without paying property taxes as in the

good old days?