Iowa looks to collect overdue fees, taxes
February 23, 2009
Iowa looks to collect overdue fees, taxes
Associated Press
3:14 PM CST, February 22, 2009
An Iowa lawmaker says it’s time for people who owe the state money to pay up.
Rep. Paul Bell, D-Newton, has filed a bill that targets owners of mobile or manufactured homes who are delinquent on property taxes by preventing them from renewing their vehicle registration.
Bell said the bill, which is being pushed by some local governments, is a mostly symbolic gesture, but one that’s gaining attention.
He says the state needs to do something to address the $525 million that is owed the state in unpaid fees, fines and taxes, according to the Iowa Department of Revenue and Finance.
That doesn’t include what’s owed to the states 947 cities. Des Moines alone has more than $1 million in unpaid parking tickets.
“Maybe we need just a whole overhaul, whether it’s court fees or anything else,” said Bell, who filed the bill on behalf of his county treasurer. “It’s an issue we have to look at but there’s a fine line. Do we put them in jail? But then you pay for that, too. It’s just a vicious circle.”
Bell says his bill targets owners of mobile and manufactured homes because it’s difficult to collect unpaid taxes on such property through the usual means.
Steven Johnson, a mobile home owner in the Pine Grove Mobile Home Park in Des Moines, owes about $58 for taxes and late fees that are about five months overdue. He said the proposed law doesn’t make sense.
“I don’t think that would be right. For a measly $55?” he said.
Johnson said restricting his vehicle registration would make it difficult for him to work.
Delinquent taxes on mobile homes, like most property, can be sold at tax sales to investors who hold a tax lien certificate until the owner pays the tax and interest to the certificate holder.
Unlike other property, however, most tax certificates on mobile homes go unsold because buyers consider them poor investments. Mobile homes with delinquent taxes are often uninhabitable and are worth little if the certificate holder were left to claim the home’s deed.
In addition, most mobile home owners do not own the land where their home sits. The owners of Pine Grove Mobile Home Park, for example, pay $25,000 a year in taxes and are current on those payments. However, multiple tenants are behind on their individual tax on their mobile home.
In Polk County alone, there are 866 mobile homes that are delinquent. Of those, 299 have unredeemed tax sale liens worth $84,793.
“It’s affordable housing. But, just like people who live in regular homes, you have a percentage who don’t take care of their business,” said Darrell Bauman, president of the Iowa State County Treasurers Association, a group that supports the bill.
The Legislature approved a measure in 2006 that gives cities the ability to place a hold on income tax returns for residents who don’t pay fines, but the law doesn’t include unpaid mobile home taxes.
“Everybody has got to pay their taxes. Ignoring that because times are tough is not fair to everybody else,” said Jay Syverson of the Iowa State Association of Counties.
Bell admits the proposed law probably won’t pass because of concerns about its affect on the poor.
Tim Shanahan, executive director of Hawthorne Hill Ministries, a Des Moines-based group that operates housing programs for homeless families, opposes the bill.
“Something like that would make it difficult for families to do their daily functions they need to survive, like going to work,” Shanahan said.