Financially strapped Stafford County this year will lose roughly 10 percent of its tax revenue, or more than $2 million, because of poor collection efforts and taxpayer tardiness, giving the county one of the worst tax collection records in the region, officials say.
The collection rate is two to three times worse than that of neighboring Prince William County and as much as 10 times worse than that of Fairfax County--so poor that Stafford officials have asked the Board of Supervisors to consider significantly increasing the interest rate charged late payers in an effort to force defaulters to pay up.
In addition, officials may ask the board next week to hire a full-time employe to collect back taxes and buy computer components that would speed collection procedures. Stafford's collection rate is about 90 percent.
"It can hurt your bond rating when your percentage of collection drops below 98 percent," County Administrator Richard Bain said, referring to the rating given municipal bond offers by financial firms. A low bond rating can increase substantially the amount a jurisdiction must pay in interest to attract money from investors. "It's just a tremendous problem," he said.
Stafford, for instance, has an A bond rating, which is one step below neighboring Prince William County's AA rating and two notches below Fairfax County's AAA rating, the highest possible.
"Anything below 100 percent collection of tax payment is a problem," said Jim Sandifer, assistant director of finance for Fairfax County, where collections average between 98 and 99 percent. "But our mechanism is such that only a very small percentage of our citizenry is in default."
In Fairfax County in 1981, for instance, the delinquent taxes amounted to $4.3 million out of a total expected revenue of $368 million, or about 1.2 percent. Completed figures were not available for 1982 because billing is still pending for the latter part of 1982.
In Prince William County, where there is a little more of a problem, county spokesman Michael Gleason said the county is planning on stepping up its already aggressive collection efforts. From 1980 to 1982, Prince William failed to collect $5.5 million in real estate and personal property taxes--an amount that represents about 4 percent of the county's assessed tax dollars for that same period.
Stafford's county attorney, Ross Horton, in a written report to the board last week, suggested the county increase the interest penalty applied to outstanding tax money from the current 10 percent. That would bring it more in line with its neighboring jurisdictions, such as Fairfax County, where delinquent taxpayers can face as much as 26 percent interest charged against the amount they have failed to pay.
Bain said he also is concerned about what would happen to the money that would be gained by collecting increased interest penalties. Among the things that should be considered, he said, is how the county ought to invest the fine revenues to increase earnings for Stafford County, which has been walking a tightrope between being in the red and being in the black.
"It's a matter of going back and factoring," Bain said. "Suppose you collect a half a million and invest it. You're going to be getting 8 percent on that.
"Without penalties and interest to force people to pay up , we've seen delinquent taxes go up by half a million in just one year."
There may be some opposition among the supervisors, however. George Washington District Supervisor Alvin Bandy said at the board's June 7 meeting that the suggestions by administrators would have to be scrutinized.
"Sometimes it costs as much to collect the taxes as the taxes themselves," Bandy said.
Catching up with the delinquent taxpayers through more aggressive procedures has indeed meant spending additional money in Prince William where, for example, collections expenditures will go from $62,000 in this year to $97,000 in 1984, county spokesman Gleason said. But officials there say they consider it a good investment.
According to Connie Bawcum, the county's director of finance, "We spend significantly less on the collection effort than what is collected. It will more than pay for itself several times over."
So effective is the program, Gleason said, that the county has beefed up its own internal handling of the procedure. "We're going to become more aggressive in collection before turning them over to the court. We're going to spend more on attorney's fees."
Stafford's collection rate has been about 90 percent for the last three years. Prior to 1980, when the county went to semiannual collections and the percentage was thrown off by the switch, the percentage of collections went as low as 76 percent in 1979 and 70 percent in 1978.
"It all depends on how bad they want to get the job done," Bain said, referring to the supervisors. "We don't have the staff to respond to the needs the county has now. It's going to take some money."