ALAMEDA COUNTY PROPERTY TAX PAYMENT PROGRAM

By R. D. "Rusty" Jackson

EXECUTIVE SUMMARY

The Alameda County Property Tax Payment Program is an attempt to assist Alameda County homeowners with the payment of their property taxes. Every year countless homeowners experience difficulties in paying their property taxes. This program is designed to facilitate the payment of said property taxes.

BACKGROUND

Every year almost every county in the State of California holds an auction of tax defaulted properties. In many if not most cases the auction is a result of taxpayers who have encountered some type of financial or personal problems which inhibit or prevent their ability to pay their property taxes. Once the property taxes become delinquent for five years by law the subject property is put up for auction by the county. The resulting auction and the actions leading to the auction cause great emotional and additional financial hardships to the property owner. Alameda County usually has an annual auction. This program is designed to reduce the number of tax defaulted properties with the ultimate goal to eliminate tax defaulted properties in Alameda County.

PROGRAM OBJECTIVES

The objective of this program is to have Alameda County enter into partnerships with financial service companies ( banks, savings & loans and credit unions ) to set up property tax payment accounts for homeowners. These property tax payment accounts would be set up similar to impound accounts that some homeowners have. However, this program would have some rather significant differences. Homeowners would contribute or pay monthly an amount equal to 1/12 of the property taxes. The financial services company (bank or credit union) would pay the homeowner interest on the funds deposited in the property tax payment account. At the time the property taxes are due the financial services company would make the property tax payment for said taxpayer. The interest earned on the monthly deposits would also be applied to the property taxes therefore the property taxpayer pay less out of their pockets to pay the total amount of their property taxes.

ADVANTAGES OF PARTICIPATION

The financial services companies ( banks, credit unions and mortgage companies ) have use of this money during the time that the account is being built up due to monthly payments (contributions). The financial services companies can utilize these funds in anyway they deem prudent in conducting their business. For banks one example can be overnight loans that they make to other banks. Therefore financial service companies can make a profit by utilizing these funds in the practice of their business. The homeowner/property taxpayer has an additional option to pay their property taxes in a manner that better suits their financial circumstance. Additionally, it is hoped and anticipated that this additional option will contribute to the reduction and eventual elimination of taxpayers inability to pay their property taxes.