SYRACUSE -- City officials are weighing possible measures to go after deadbeat property owners -- particularly developers -- who are seen as exploiting property tax collection regulations.
Delinquent property taxes currently total more than $780,000, said City Manager Bob Rice, with most of the money owed by developers who are using the method to bankroll the purchase of property. He said the city's cut of the unpaid taxes would be approximately $103,000.
Officials said an additional $100,000 in tax revenue would make a difference at the city level in addressing problematic road maintenance and repair.
Taxes are collected by the county, and delinquent taxpayers have five years before legal action is normally pursued. Rice said developers own a number of lots for which they have not paid taxes for five years. When collection action is pursued, the owner pays just one back year of taxes, the oldest year, to avoid losing the property to a tax lien.
Rice said relatively few homeowners are delinquent on their taxes and described the cadre of abusers as a "handful of developers."
"They're using the city as a bank. They don't pay their property taxes," Rice said.
He noted over 60 percent of the unpaid taxes are linked to one developer, who has been buying up property within city limits.
"It's marginally legal, but definitely not ethical," Rice said of the practice.
Mayor Jamie Nagle said the concern in trying to find a way to close the loophole is to not send a negative signal to the business community, which drives developers away.
She said she has talked to local state senators about the problem and will bring up the issue at a meeting of Davis County mayors in the future. She is hopeful that neighboring communities will address the issue at the same time as Syracuse.
Councilman Alan Clark said addressing the problem with a new ordinance could send the wrong signal.
"If we become a pain in the rear, they'll go elsewhere to develop," Clark said.
Officials talked about potential restrictions on building permits or other possible methods they could impose to force payment of the back taxes.
Nagle said she has little hope state officials will address the problem.
"Quite candidly, I am not very optimistic. Many legislators are in the real estate business," Nagle said.