City tax collections lag

Published 10:39 am Saturday, March 27, 2010

FRANKLIN—A hiring freeze and elimination of all non-essential travel are among the ways the city is looking to cut costs as tax collections lag behind last year’s levels.

“We want to make some cost reductions to kind of compensate for the reduced revenue that we’ve collected so far,” said Amber Stansbury, the city’s interim finance director.

According to a report Stansbury gave the City Council this week, revenue from real estate and personal property taxes, as well as business licenses, is down from last year’s levels. However, revenue from service charges is up significantly.

The figures presented were as of Feb. 28.

“Even though we’re down in our taxes line item, we are up in our service-charges line item, so overall we’re still up about $75,000 for the year,” she said. The service charges include garbage bills, which increased as a result of higher tipping fees charged by the Southeastern Public Service Authority.

While city officials look to cut costs, they also are looking to increase tax collections.

“We have a list of five things that we’re going to be doing to try to increase that revenue collection,” Stansbury said.

She said the city is reimplementing wage garnishments and the Department of Motor Vehicles stop program. The stop program allows localities to block the DMV accounts of residents who have not paid vehicle decal fees or personal property tax bills in full. It prevents a vehicle owner from renewing license tags, driver’s licenses and other actions.

Debt setoff is another way the city will collects back taxes. The Virginia Department of Taxation is required to check for outstanding debts with local governments before issuing refunds. If any such debt is found, all or part of a taxpayer’s refund may be withheld to help satisfy the debt.

Stansbury said city Treasurer Dinah Babb is also looking into what the city can do collect unclaimed property of delinquent taxpayers at the state level.

The city will also try to connect with delinquent taxpayers through phone calls and letters.

“And that’s primarily how we will address the $100,000 reduction with our business licenses,” she said. “Either through letters or personal visits to the businesses that have not paid.”