NOTE from APTAWEB: The following article is printed in the June 7^th issue of the Apalachicola Times.

The number of tax certificates sold last Friday at the county courthouse increased sharply over previous years, providing one more possible indicator that rising land values are making taxes harder for county property owners to pay.

Tax Collector James Harris Jr. said Monday that his office auctioned off 1,118 tax certificates at the all-day sale, about one-third more than last year’s total of 838.

During the four years prior to that, for tax years 2001 through 2005, the county averaged about 669 tax certificates sold each year, which is about 60 percent of this year’s total.

Tax certificates are sold each year for the amount of a property’s unpaid taxes, with bidders competing to obtain the best interest rate they can on the certificate’s value. Beginning at 18 percent, or the equivalent of 1.5 percent per month, the bidders drive down the interest rate they are willing to accept on the certificates, which has a statutory minimum of 5 percent.

The successful bidder at this "reverse auction" pays off the unpaid taxes, obtains a first lien on the property, and must hold the certificate for at least two years, and no more than seven, before he or she can obtain a tax deed and seek to recoup
their profit.

Harris said 55 bidders took part in the tax sale on the top floor of the county courthouse, which is slightly more than is typically the case. The interest rates to be paid averaged between 10 and 12 percent, he estimated, about 2 percentage points last year’s banner year for bidders.

"It ran very smoothly," Harris said. "We didn’t have the record year like last year for high interest rates. They’re now back to normal. That’s good, because I want to keep the costs down for the property owners."

The dollar amount of all the certificates sold totaled a little more than $2.55 million, about 82 percent more than last year’s $1.4 million.

This year’s total is six times the value of tax certificates sold in 2002, and more than three times the total value of certificates sold just two years ago.

"Taxable values are higher," said Harris, noting there also has been a steady growth in the number of taxable land parcels in the county over the past six years.

The tax certificates of those property owners who have a homestead exemption and who owe less than $100 are "struck" to the county, meaning they are taken off the auction block and kept in the hands of the county, at 18 percent interest.

Harris said this year’s sale yielded 27 such "county certificates" for a combined value of $2,894, in keeping with a steady but not sharp increase since 2002 in the number of this type of unpaid taxes.

Between 2002 and 2005, the tax collectors’ office retained county certificates each year totaling in the $22,000 to $25,000 range, but most of that was attributable to back taxes owed by Weems Memorial Hospital.

On May 29, the tax collector’s office secured a judgment from Circuit Judge William Gary for $106,621 from DasSee Community Health Systems, for back taxes, interest and attorney fees. That judgment now bears interest at 11 percent per year, although it is not clear whether DasSee, now defunct, has the resources to pay it.

As is his style, Harris conducted the all-day auction in a relaxed atmosphere, cracking jokes as he kept it moving briskly along. Sarah Braswell, an assistant tax clerk, inputted the numbers into a computer following each successful bid.

Harris said he has no plans to switch to an electronic auction system, a computerized option that Gulf County began with this year.

"I don’t want to do it," he said. "I asked and everybody said no. They love to go to the sale."

As it stands now, the county gets a 5 percent commission on the total dollar amount of certificates sold, which this year would amount to about $127,605. The county also is paid $6.25 for each tax certificate redeemed, although under an electronic system, the company facilitating the sale would charge an additional $14 per certificate.

Harris, now in his fourth term, said he is hoping that the Florida Legislature acts this month at its special session to implement property tax reform.

"I’m hoping they do something," he said. "The people in Franklin County and throughout Florida need a relief from high property taxes."

Harris, first elected in 1992 at age 32, said he plans to seek a fifth term next year. "I hope I serve the people well," he said. "My goal is to put customer service number one."