My tax bill arrived in the mail on Monday. When I opened it, it hit just like a letter bomb. From what I saw on the Channel 6 news Tuesday night, it produced a similar reaction in households across the city.
My bill for the second quarter was $1,170, or about $400 more than what it was for the previous quarter. Fortunately, my property taxes are bundled into my mortgage, so it won't immediately hit me. The increase will become part of next year's mortgage payments which begin in November, so the impact will be spread out over 12 months.
The problem with this whopper of an increase is that most people in Trenton live on fairly low incomes. They either work at jobs which pay a little more than the minimum wage or collect some type of government check like Social Security, SSI or welfare. Many of them own their own homes free and clear because the houses have been in the family for years. For low income people, normally owning your own home is an advantage, but not now.
The city has an accelerated tax sale program, and tax sales are held shortly after the May taxes are due.
In other words, if homeowners don't cough up every penny they owe on taxes by some time in the beginning of June, they will be assessed an additional fee of about $100 or so for a legal notice advertising their house for tax sale. Also, they will have to pay in cash, certified check or money order. Personal checks will not be accepted once the advertising fee is imposed.
No one will be kicked out of their home immediately as a result of the tax sale. The lien is simply sold to an investor who bids on an interest rate. However after two years, the investor can foreclose on the lien and get the house for the price of the back taxes if the homeowner hasn't paid off the lien in full by that time.
My guess is lots of people won't make the deadline this time. They won't have the money to pay and will let their homes go into tax sale. Most probably won't have the money in the future to bail out their homes either. After all, poor people don't make much money, and the other bills just keep on coming.
So, what will they do? Eventually, many will try to sell their homes, but with lots of other families in the same boat there will be more houses on the market than there are buyers so they won't get much. By the way, is there ever much of a market for beat up houses in the ghetto?
In the end, they will either get peanuts for their properties or the investor will get to take them. Then they will be out on the street and will have to pay rent, which will most likely be more than what their monthly tax bill was. I don't know how they will be able to pay rent if they can't pay taxes.
I hope the Rescue Mission is prepared to take in lots of homeless families.