Changes overdue in Fulton tax lien sales process

Some degree of citizen trust in government is essential to a well-functioning free society.
Public officials and their agencies should always behave in a manner which earns and maintains that trust. When that’s not the case, the public good suffers and government eventually becomes hampered in its conduct of essential work.
This widely understood cornerstone of civic knowledge has not penetrated the walls of Fulton County Tax Commissioner Arthur Ferdinand’s offices. As reporting last week by The Atlanta Journal-Constitution shows, the office’s practices around sales of tax liens raise troubling questions about whether the public’s best interest is being served.
Such concerns about the pursuit of a key governmental function — tax collection — should not be the case, especially in a county already riven with political strife. All of Fulton  deserves better.
The AJC’s reporting shows that Ferdinand’s office has run a brisk business in selling tax liens — in effect, privatizing the collection of overdue taxes and guaranteeing their remittance to both the county as well as cities that contract with Ferdinand.
It’s initially tempting to think only that this public-private partnership of sorts benefits county taxpayers by ensuring collection of what’s owed. Such an end is nowhere near justified by its problematic means.
And such a belief evaporates quickly upon a closer look at the office’s operating model. Yes, selling the tax liens produces payment up front as lien purchasers first pay off delinquent taxes before pursuing debtors. But it’s instructive to look at why companies buy the liens in the first place? In a word — penalties.
If payment’s not received after 90 days from the due date of the initial tax bill, a 10 percent penalty can be attached to the total amount owed. Whoever goes after the overdue payments — be it a government office or private business — gets to keep the penalty, as well as interest that begins to accrue on the debt.
This newspaper’s reporting shows that Fulton’s practice of selling liens before penalties apply has cost county taxpayers as much as $20 million since 2002. That’s money granted to the private sector that could have entered recession-ravaged county coffers. Some liens were sold only a day or two before the penalty would have kicked in .
Ferdinand’s pattern of last-minute sales, while legal, rightfully arouses suspicion of his office’s motives and raises questions about the relationship between the tax commissioner and the lien-buying companies.  Property owners have also contended they weren’t adequately notified of liens.
Concerns have also been raised about Ferdinand’s practice of charging personal fees for billing taxes for three large cities. These payments contributed to his becoming the state’s highest-paid elected official. Ferdinand’s imperious dismissal of many concerns has also done nothing to build confidence in his office’s work. As an example, he told this newspaper that it would cost more than $16 million to provide requested tax data. He lost that battle after Attorney General Sam Olens threatened to sue.
These are all logical concerns, even if the true answer is that there is nothing currently illegal or improper going on.
It goes without saying that government should operate in a legal and ethical manner. Yet, legality alone should not legitimize behavior that, while within the limits of the law, fails the tests of common sense, if not propriety as well.
As importantly, the tax commissioner’s practices deepen ongoing, broader suspicions about government and its officials. Such persistent bad blood has substantially harmed the relationship between citizens and the public sector. Wariness of government is one thing.  That can help keep public servants on their toes.
Yet, a chronic and deep mistrust of government does our society no good. Worse yet, it can harm government’s ability to achieve legitimate and lawful functions. The distrust-fueled beat-down of the T-SPLOST last summer proves this point.
Thus it is not surprising that county and state lawmakers have been critical of Ferdinand’s office. Members of Fulton’s Gold Dome contingent are promising to pursue legislative solutions for reform  .
Given Ferdinand’s ongoing insistence that all is good with the status quo, lawmakers should continue in their quest for change until they’ve achieved an effective remedy to Fulton’s problem. The cause of good government demands no less.

Andre Jackson, for the Editorial Board.

2 comments Add your comment

GP Jeff

March 5th, 2013
12:46 pm

In every other instance, I’m against the gerrymandered republican takeover of Fulton County gov’t, but in this case, I’m eager to see Commissioner Ferdinand taken down. “Imperious” is a good adjective to describe his very lucrative reign over his subjects. He has engaged in legal theft long enough! Overthrown King Ferdinand and free us from his greedy grasp!

just me

March 4th, 2013
4:04 pm

Can we also renew the discussion about how when a property is auctioned off due to tax debt, the homeowner is due the balance of the sale price minus the tax debt. However, this money generally does not make it to the homeowner.