More Tampa Bay property owners than ever before failed to pay their real estate taxes this year.
The surge is unprecedented, officials say, and the reasons are clear: a slumping real estate market, stagnant wages, growing unemployment and the rising cost of energy, goods and services.
"It's the economy, the economy, the economy," Pasco County Tax Collector Mike Olson said. "It doesn't take a rocket scientist to figure out what is going on."
Some taxpayers, credit experts say, find themselves unable to pay tax bills that were not included as escrow payments in their subprime mortgages.
The increase in tax delinquencies does not threaten local government operations.
That's because the unpaid taxes represent a meager fraction of the total property tax revenues that local governments collect. And there's a mechanism — the tax certificate auction — for governments to recoup unpaid bills.
But more people are seeing their homeowner status jeopardized.
"When the economy turns, which it eventually will, all these problems will go away," Olson said. "But the unfortunate thing is how people's lives get turned upside down until that happens."
In Florida, tax bills are mailed out in November. They become delinquent if not paid by April 1. Around the end of April, tax collectors advertise the unpaid accounts for auction, which take place by June 1.
Between the time delinquent accounts are advertised and when an auction is held, many property owners resolve their debt, either by paying up or declaring bankruptcy.
Still, the number of advertised accounts gives a good snapshot of how many property owners had not paid tax bills after April 1.
In Pinellas, those numbers rose nearly 23 percent this year, coming on top of a 37 percent increase last year.
Other counties saw even bigger increases this year: 27 percent in Hernando, 30 percent in Hillsborough and 33 percent in Pasco.
Statewide figures are not available, but counties around Florida have seen, on average, about a 20 percent hike this year in the number of unpaid property tax accounts, said Dale Summerford, Gadsden County's tax collector and past president of the Florida Tax Collectors Association.
Debt and home ownership counselors say they are getting more requests for assistance than ever before, many from people who can't pay their property tax bills.
Unlike standard home loans, some subprime mortgages issued in recent years lacked escrow provisions that require owners to pay monthly toward their annual tax and insurance obligations, said William Sanchez of the Tampa Bay Community Development Corp.
The idea was to make the mortgages attractive to borrowers, Sanchez said. But more and more he sees owners with subprime mortgages coming in for help because they can't pay their whole tax bill when it comes due.
With cash scarce, property owners are choosing which debts to pay and which to let slide, Hillsborough County Tax Collector Doug Belden said.
They may pay the mortgage to avoid foreclosure. By comparison, not paying your property tax bill creates less immediate jeopardy.
"From a standpoint of protecting your investment, particularly your homestead, I would think you would want to pay your mortgage first," Belden said.
For local governments the safety valve on unpaid property tax accounts is the tax certificate auction.
Investors purchase tax certificates — essentially the right to collect the amount of taxes due — by paying the tax bills themselves.
The property owner then has two years to pay the investor back the tax owed, plus interest of 0 to 18 percent. To protect homeowners, Florida law awards the tax certificate to the bidder who offers the lowest interest rate.
If property owners pay the tax bill plus interest within two years, they're in the clear. If not, the investor can call for the property itself to be auctioned off at what's called a tax deed sale.
Around Tampa Bay, tax collectors report they had pretty successful auctions this year. On average, Pinellas, Hillsborough, Pasco and Hernando tax collectors recouped 96 percent of the total amount owed.
But tax collectors say that elsewhere in the state investors did not show a similar appetite for certificates as in years past, a worrisome sign.
Once the domain of mom-and-pop speculators, large investment houses now control the tax certificate market.
Deborah Marks, general counsel for one such business, Gulf Group Holdings Acquisitions & Applications in Miami, said you don't have to look far for why there are so many tax certificates for sale.
"I don't know if you've gassed your car today," she said. "I'm not looking forward to gassing my car. It's tough times all around."
Will Van Sant can be reached at [email protected] or (727) 445-4166.