Dan Genz, The Examiner
2008-03-19 07:00:00.0
Current rank: Not ranked

WASHINGTON -

An unexpectedly large number of Prince William County residents aren’t paying their property tax bills, which could mean even less money for the county’s already woeful budget.

“A lot of our letters, a lot of our phone calls are going unanswered,” Finance Director Chris Martino told the Board of Supervisors on Tuesday.

The problem is linked to the economy’s decline, including dramatic increases in foreclosure filings over the last year, accounting for thousands of vacant homes.

Martino raised concerns that it would be more difficult to collect the property taxes and personal property taxes countywide.

“When the economy is going well, when people are making more money, this is not a problem,” Martino said, adding it was not clear how serious the problem could be.

The county typically has a 99 percent collection rate, but has no statistics about how the delinquencies could affect its budget.

Residential property values sunk almost 15 percent last year, as the subprime mortgage debacle, credit market slump and excess building swamped the market and left thousands of homes up for sale, dropping prices.

It is one of several factors, including decreasing investment income, lower sales tax revenues and lower personal property taxes, that could make the budget forecast more precarious.

The county eventually will get its money, Martino said, but it could take years to recoup the tax bills in some cases.

The supervisors also learned Tuesday that the county’s investment income will drop significantly because of the Federal Reserve’s decision to slash a key interest rate another 0.75 percent.

Interest rates tied to the Fed’s moves are now half of what they were when the county held its first budget workshop in October.

The report came as supervisors learned of another agency struggling to meet its current-year budget projections.

Declining court revenues contributed to a $1.36 million shortfall for the office of the clerk of the Circuit Court.

The drop will require laying off three workers, eliminating a dispute-resolution program and halting annual contributions to long-term courthouse improvements.

dgenz@dcexaminer.com