New state law squeezes Douglas County
County officials are preparing to comply with a new state law that will reduce revenue for economic development and tourism.
SUPERIOR — A new law that went into effect April 1 is placing additional demands on county government while undercutting the ability to raise revenue.
For Douglas County, 2021 Wisconsin Act 216 could limit its ability to fund economic development, tourism and nongovernmental agencies long supported with land sale proceeds. Officials will be required to hold those proceeds in reserve for up to five years for former owners of tax delinquent properties the county sells.
While the total amount allocated from the sale of tax delinquent properties varies year-over-year, in 2021 it was $149,750. That included $40,000 to the Humane Society of Douglas County, $30,000 to the Development Association, $28,000 to the Head of the Lakes Fairgrounds, $22,500 to Travel Superior, $15,000 to 4-H, $7,500 to the Douglas County Historical Society, $3,750 to the Lucius Woods Performing Art Center and $3,000 for special projects.
The county’s land and development committee, which oversees land sales, began work Tuesday, April 26, to comply with the law.
The county can recover unpaid taxes, interest, penalties and actual costs associated with the sale of tax delinquent properties.
Under the new law, counties are also required to pay off any liens on the property before the former owner receives anything. In the event the net proceeds are insufficient to pay all lienholders, the money is to be distributed with the priority based on the date of the lien as determined by the county’s circuit court.
Once notified by the county, former owners previously had 60 days to reply to the county in writing that they would like to share in the proceeds of a sale. Instead, the new law gives property owners up to five years to claim any remaining equity in their tax-forfeited property, and it will affect tax-deeded property taken this year, county officials said.
The change didn't sit well with Supervisor Charlie Glazman, he said.
“If I can editorialize a little bit, it bothers me that prior owners who have not taken enough responsibility to pay the taxes … now they’re going to get a check for not doing anything, basically," he said.
Glazman asked what efforts the county would have to make to track down the owner and whether the county would be able to recoup those costs.
Douglas County Clerk Sue Sandvick said she doesn’t believe the county would be required to track down former owners. County officials must notify former owners by registered or certified mail sent to the mailing address on their tax bill.
“We’ll have to set up a reserve account and keep track for five years,” Sandvick said.
Officials will also have to track expenses incurred to recover costs associated with the sale of the property.
Sandvick said she is working on a list of possible expenses the county could run into in taking and selling tax-forfeited property. So far, they include expenses related to foreclosure, record-keeping, legal costs, title insurance, maintenance to comply with building codes and health orders, costs associated with the sale of the property, and committee and board expenses.
“I think we’ve got to look at a land sales database, the cost to maintain that database,” Supervisor Alan Jaques said.
The county should recover every expense it can, Jacques said.
The list of expenses Sandvick provided to the committee is still "a work in progress," she said.
Sandvick will work in consultation with corporation counsel to ensure the county complies with the new law and recovers every cost it can to have something in place before the county takes tax deeds this year, she said.
In recent years, the number of tax deeds taken annually has declined. Officials attributed the drop to the county treasurer’s office implementing payment plans to help people pay property taxes they had fallen behind on in manageable increments.