Strongarm Tactics Again Evident In Property Tax Proposal
Latest "Last Chance" Plan To Bail Out Budget May Put Property, Homeowners At Risk
Government House, St. Croix
They haven’t collected property taxes in four years – and now they want you to pay.
And if you don’t, or you can’t in the time they determine is adequate, that property may belong to the bank. And there won’t be a thing you can do about it.
Or you can sign on to the Lt. Governor’s “installment” plan, and pay 106% of the value of the back taxes. That’s right – they’ll charge you interest on taxes they never bothered to collect.
And now we are told that without these tax revenues, and additional borrowing, we’re facing government shutdown by the end of June.
Last week, the Legislature received a bill proposal from Lt. Governor Gregory Francis. The bill, if approved, would allow the government to send out 2006 and 2007 tax bills using 1998 rates and values. This would provide an estimated $30 million from 2006 and about $50 million from 2007, and would be used to decrease the now estimated $170 million budget deficit for FY 2010.
The proposed legislation would also allow the government to sell 2007 tax receivables (bills) to a bank or other financial institution, which would then loan the government the $50 million those taxes are worth in a lump sum. The bank would get repaid as the taxes were collected.
And this is where it starts to get tricky.
Simply put, the government will sell your tax bill to a third party, probably a bank, and the bank gets paid back as the taxes are collected. Depending on who the taxes are sold to, and what their collection requirements are, Virgin Islanders could find themselves losing property because they can’t pay back taxes that were never billed.
But wait, it gets better.
Francis has since proposed an “easy payment” plan for those who choose to pay the debt in installments. You can pay monthly, quarterly or every six months. But no matter what plan you choose, you will pay 106% of the amount due. So, in effect, you are being charged interest on the tax you owe because the government is collecting it several years late.
Under the Francis plan, only those who owe no previous delinquent taxes can qualify for the installment plan and taxes will be deemed delinquent 60 days after tax bills are issued.
How did we get here?
It all started when the Executive branch decided not to collect property taxes at the court approved 1998 level. A more recent, higher tax level is tied up in the courts and a 2003 injunction restricts taxation to the 1998 level. But, for reasons we are at a loss to explain, instead of collecting at the rate they could, they decided not to collect any taxes at all.
As recently as Feb.17, 2010, District Court Judge Curtis Gomez denied the latest government request to lift the injunction, and questioned again why the decision was to collect no taxes, when taxes at the 1998 level were approved.
And now once again the Legislature is being encouraged to approve a “last-chance” bailout plan that puts the taxpaying public on the firing line for fiscal irresponsibility perpetrated by the Executive Branch. And while they are being pressed to approve this bill in their session this Monday and Tuesday, there are many, many questions that must be answered first.
The intent of the asset sale as described is to get $50 million into the hands of the government in a hurry. But the ramifications of this approach are huge. Who will be the purchaser of the assets and how will that decision be determined? What will be the payback provisions once these assets are sold?  What types of fees will the government have to pay to the agency collecting the funds? Will there be any appeal process for an individual who is unable to meet the terms or is there the real possibility that property will be “repossessed” so the government can collect a quick $50 million?
And while an “installment plan” seems reasonable, especially since it was the government’s decision in the first place not to collect the taxes, why should the taxpayer be charged interest on a debt that was never issued?
Senators, you must say no. No to this tax plan. No to additional borrowing. No more.
The Administration created this problem through its ongoing and obvious fiscal irresponsibility. An already financially strapped public cannot be expected to solve it for them.
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this hasnt been a de Jongh Francis administrative problem. It started before they were inaugurated. The VI couldn’t have gotten luckier with Gov de Jongh & Lt. Gov Francis. There has been no better administration than these two in the United States in my eyes.
Obviously you have been blinded by the Kool-aid.
Turnbull collected the taxes at the old rate. This Admin refused to collect at the court approved rate. This was done purposely to put the gov’t in a money crisis. That enabled them to float bonds and borrow. Who do you think purchased those bonds? PH noted or should I say infamous landlord and advisor to the Governor. Who do you think will be buying up our tax liens. None other than deWolf and friends.
Let’s see what’s been going on:
Some people may lose their property BECAUSE of the governor’s warring the court.
The territory may lose significant shares of the Rum-rebate taxes BECAUSE of the governor’s warring Puerto Rico.
The local government may lose some local-autonomy BECAUSE of the governor’s warring the Federal Inspector General’s Office. (The consequence could very well be a federally appointed CFO)
It is time for a Change and a New Direction!
Agreed, these problems stemming from the back taxes were in leiu long before the deJongh Administration. Kinda unfair references being thrown around. The Kool Aid may need a little more sugar but it’s the best damn punch I’ve tasted in hmm about 26 years. Don’t really have a problem with Greg’s plan.
Greg doesn’t have a plan. Greg was given a plan. The Kool-aid has sugar for those in denial of the FACTS.
@ the first Anonymous,
You said, “this hasnt been a de Jongh Francis administrative problem. It started before they were inaugurated.” Either you were sleeping or you are deliberately avoiding reality. As the second Anonymous correctly stated, the pass administration collected the property taxes at the 1998 rate. However, when this waste of time administration (Dewolf-Francis) came into office, their arrogrance was immediately displayed and they foolishly and willfully decided not to collect property taxes at the old rate. They went for the new rate, which the court prevented them from doing. Bravo to the court. Remember they were able to still collect property taxes at 1998 rate. How many times must you be told that fact. And to insult the intellegence of the bloggers on this site, you ( the first Anonymous or Cruzan mis-educator) have the audacity to say there have been no better administration than this self-serving one, Dewolf and his gang. This is by far the worst administration ever. Now that the administration is in its final year of the term, they are trying to pull a wool over people eyes with talks of economic development and progress. But for who? Dewolf and his croonies, that’s who. The public needs to be given adequate time to pay their taxes in these difficult economic times and not strongarmed into paying two within a short time frame. Also we need not our property receivables to be sold to a third party on the account of pure arrogance and greed of this wasteful inept administration. God help us and deliver us from this evil administration. “When the righteous are in authority the people rejoice but when the wicked beareth rule the people mourn.” (Proverbs 29:2 – KJV)
TO ‘ANONYMOUS’ @ 3.33am: I can’t believe you got out of your bed before the crack of dawn to recite the same nonsense (mantra)your neophyte-of-a-president,’The Audacious One’,has been espousing…..to wit: all respective problems came about
prior to the current administration coming into office.
How can the deJongh administration arrogantly refuse to send out property tax bills advising homeowners of the taxes owed,and then
decide,years later,that not only are they delinquent,but a burdensome interest will also be added.Where are the people going
to find the funds to now pay for these multi-year obligations?
I cannot for the life of me understand the rationale behind some of the policies and decisions being made by the executive and legislative branches of the government of the Virgin Islands.I just can’t.
What a sad,sad state of affairs!!
WE ARE THE VICTIMS OF A CURRUPT ADMINISTRATION:
* Rum Wars (Diagio and Cruzan deals)
* 5 Years Property Taxes
* Mafoliegate
* Constitution Sabotage
* Election Fraud (using gov. equipment for campaign)
* Political Hiring
* Escalating Crime
* No medical services in Fredericksted
* Lottery funds peculation
and more…….
WHEN ARE WE GOING TO DEMAND THAT GOV. DEJONGH RESIGN???????
Wait.. got to be reasonable.
just because taxes have not been collected for four years, does not mean it was written off and anyone that thinks it was never going to be due is engaged in wishful thinking.
60 days from issue to pay is reasonable, considering it is 4 YEARS overdue.
6% interest for extended payments is reasonable.
5% discount for early payment is reasonable.
The only part I find unreasonable is the selling of Tax Dues to the banks, but I do not see that in anything linked in this article. If that is elsewhere, please give a link to that information.
@ ‘STX2006′: I certainly didn’t mean to imply that’just because taxes have not been collected for four years’ they would ‘be written off’.Not at all.Not by any stretch of the imagination.
The article,if I’m reading it correctly,states that Lt.Governor,
Gregory Francis,recently sent a’bill proposal’to the legislature
proposing tax bills for the years 2006 and 2007 be sent out.
My concern is (assuming the bill is passed) the difficulty many will have in coming up with the funds for the combined years of 2006 and 2007–’60 days after issue’ as you pointed out–in the meeting of their obligations.
Eighty million dollars worth of those collections,I note,will be directed towards the paring down of the projected $170 million deficit in this year’s budget.
Who recalls the lender that came to STX after Hugo? “South” something, I think. They came here to give out loans to homeowners to repair the damage from Hugo. Problem was, they made sure not to give enough to fix the homes properly, so they obtained a bunch of properties that wound up in foreclosure. (They were the same group who wanted to build the aeronautics assembly plant on the south shore, right where Paul what’s-his-his-name wants to put the Wyndham.)
Well, this “great deal” to rebuild damaged homes cost many people their homes.( Realtor Honnie Edwards knows who the lenders are, as she was the Realtor selling the foreclosed homes.)
Anyways, this “great deal” the governor is tossing out at us rings of the same tone as the Hugo “savior” lender.
Screw DeJongh. Let him pay back the monies from the lottery, Mafoliegate, and all the other little incidentals that could float the government for another year. It’s time to get grounded, and really cut the waste.
I heard Honni Edwards is another one of those self-important, conniving, and “screw-deh-community” people who wanna be a senator too. Anyone else hear that?
Plan by whoooo? but wait..in more than 3 years we have not hear greg (lt.gov) saying anything about property tax fiasco and suddenly he have a plan…!! give me a break. not even himself believe that.
Yes, Koola, I thought the same thing while I heard LTG francis on the news yesterday, now he has a plan? Whose plan?
And it seems he has a plan for WD too, only it’s too little too late. The LTG had 3 years to work on WD, but guess he didn’t think it important until election time. Anyone who has ever come into WD with the attitude and promises of “I can do”, has only left their prestigious position because they lie. Actions speak louder than words, especially when the words are 10 years stale.
Same ole same ole. Goodbye LTG.
What was the outcome of the senate today? All I heard was Barshinger naying.