Mistakes leave taxpayers stuck with bill

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Michael Smith, left, and James Bennett don't think it is fair that they have to pay thousands of dollars in back taxes on their apartment buildings because of an error by the county tax assessor's office. Mail Tribune / Jim CravenJim Craven

October 21, 2009

By Damian Mann

Mail Tribune

James Bennett was shocked to discover the property taxes on his Medford apartments more than doubled this year because of a clerical error made by the Jackson County Assessor's Office and stunned to learn that the error means he now owes $11,446 in back taxes.

The 69-year-old Eagle Point man and owners of several other apartment buildings off Poplar Drive said they should not be penalized for a mistake made by a government agency.

"This is morally wrong," Bennett said. "This is ethically wrong. You can't do this to another human being."

Bennett owns one of four, four-unit apartment buildings that were built in 1997. His taxes rose from $2,369 last year to $5,642, a 138 percent increase. He also has to pay back taxes for five years, according to the assessor's office.

County Assessor Dan Ross said the error is not the fault of the property owners, but occurred because of an oversight in his department. Ross said a small percentage of property tax statements aren't updated when they should be, but are eventually corrected.

Oregon law requires property owners to pay the back taxes, but they aren't charged any interest, Ross said.

That's cold comfort for Bennett.

"They admit they made a mistake," he said. "They want to pass the burden onto the property owner."

Tax statements were being mailed to 98,932 Jackson County property owners starting Monday.

Ross said the mistake means the property owners were paying less than their fair share of taxes for years, while other apartment buildings around them have been charged the correct amount, he said.

"They should have been paying the taxes, and they weren't," Ross said.

Previously, property owners had to pay the back taxes within a month, but Ross said they now have almost a year to come up with the money.

Property owners have started to appeal the change, but Ross said he doubts it will be successful.

"Not when it is ironclad like this," he said.

Ross said the assessor's office receives 200 to 300 similar complaints every year. He noted that a personal friend of his had booked a trip to Italy recently when he was notified of a property tax hike that was nearly as much as the cost of his vacation.

"He was not happy with me, either," Ross said.

Bennett said the wallop to his wallet comes at a particularly difficult time. Vacancy rates have increased in Jackson County because of the sour economy, and he said one of his four units is vacant.

Bennett said his rents, which are about $650 a month, have not increased for four or five years. He figures it will take the annual income from one and a half of his rental units to pay off the back taxes.

Michael Smith said he moved here from Albuquerque, N.M., five years ago and bought his four-unit apartment off Poplar Drive from Bennett after investigating whether it would make economic sense.

Smith said he calculated he would more than break even on the deal. Now, with the increase in taxes through no fault of his own, he said he will be in the hole.

"When you get a $10,000 bill, it really sets you back," he said. "That takes away any profit I have here — it's gone."

In addition, because of the poor economy, renters who formerly paid regularly are asking for extra time on their payments.

Smith said he has to give his renters flexibility in paying their monthly bill, so he doesn't understand why the county doesn't do the same with property owners, particularly on a mistake made by the assessor's office.

If he didn't have sufficient financial resources, Smith said the extra tax charges could have led to another foreclosure, which the county can ill afford.

Smith said he was surprised to discover the assessor's office could charge for up to five years of back taxes, and he sees this as a lesson to anyone looking at real estate here.

"I do not want to buy any property in Jackson County because of the way I feel," he said.

Reach reporter Damian Mann at 776-4476, or e-mail dmann@mailtribune.com.

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