photo by: Photo by Craig Howell
State Auditor J.B. McCuskey, left, and state Sen. Ryan Weld, R-Brooke, were in Weirton in April, discussing the potential impact of Senate Bill 548 on the sale of delinquent property, as well as the removal of blight in communities across the state.
CHARLESTON — West Virginia Auditor J.B. McCuskey believes that changes made to the process surrounding tax sales of properties by county sheriff’s departments are providing benefits for property owners, local governments and economic development.
“For the last three years … we have made the reformation of our tax sale process one of our primary objectives in my office,” McCuskey said by phone this week. “The auctions that we held started to push the property into either the neighbors’ hands, the city’s hands, the county’s hands or the economic development/land bank’s hands.”
County sheriff’s departments mail out tax tickets to property owners each year. Taxes that go unpaid result in those property owners being placed on the delinquent list by the sheriff’s departments. Those lists are presented to county commissions by May 15 each year, then sent to the State Auditor’s Office by June 1.
The following year, a second list of delinquent properties is prepared by county sheriff’s departments. If taxes remain unpaid by Nov. 1, those properties are certified to the State Auditor’s Office. In order to redeem the property, the owner must pay two years of taxes, interest, charges and a redemption fee. If the taxes on the property are still unpaid, the property is certified for public auction beginning March 1 of each year. Property auctions are later held in each county.
The changes took place after the passage of Senate Bill 552 last year, the first time the sheriff’s tax sale process has been altered in more than 30 years. McCuskey said the previous process for tax sales gave too much power to out-of-state land speculators and absentee landlords to swoop in, buy properties and allow them to remain vacant and dilapidated.
“For me personally, what we saw was that while we were effective at what we were doing, the way that the law was previously was causing our office to be part of a larger issue,” McCuskey said.
“To be fair, we were part of a problem … The way that the tax sale process was and the way that we were administering it was promoting large out-of-state land buyers who didn’t have community interests at heart,” he continued. “The dilapidated building problem was being exacerbated by the fact that these buildings were by and large being owned by people who didn’t care that they were destroying communities.”
According to McCuskey, SB 552 ensures that properties end up in the hands of those who are more likely to reinvest in local communities. The new tax sale process results in more money being raised from auctions as well. According to the State Auditor’s Office, Wood County’s tax sale, held earlier this week, brought in more than $434,000. Tax sales are $10 million ahead of last year’s total at this point in the year, the office said.
“What is really interesting is that our auctions this year are intensely more profitable than they’ve ever been in history,” McCuskey said. “You’re getting more money for the property, and the people that are involved on these properties … are more than likely going to invest in these local communities.”
SB 552 was the result of McCuskey and staff of the State Auditor’s Office going around the state and seeking input from city and county officials about the issues with the tax sale process and what changes to make.
McCuskey said SB 552 was just one of several to deal with his core issue: abandoned and dilapidated properties.
Senate Bill 548, clarifying what parties can redeem delinquent property and limiting those entitled to bid, passed the Legislature earlier this year. The bill prohibits citizens of or entities organized in or controlled by citizens or governments of any country designated as a “Country of Particular Concern” by the U.S. State Department from participating in any public auction and barred from purchasing unsold lands at county tax sales.
SB 548 also prohibits anyone from participating in auctions or tax sales who are delinquent in real property taxes, who have a history of noncompliance with code enforcement, who have failed to make payments from prior auctions or who have failed to comply with raze and repair orders. Those wishing to participate in tax sales and auctions must register with the State Auditor’s Office.
Another bill — Senate Bill 722 — also provides state funding to cover the cost of tearing down dilapidated properties. That bill was also passed in 2022.
“We publicized the fact that dilapidated buildings were an enormous problem and that our local communities didn’t have the resources or the ability to remove them at a pace that kept up with them being created,” McCuskey said. “Then working with the (Department of Environmental Protection), we were able to tear down $10 million worth of buildings in the first year.”
Because of changes made due to SB 552, McCuskey said that tax redemptions by property owners are also up. As well as changing timelines, the bill allows property owners to pay their past due property taxes in four payments.
“This is really the third leg of this stool. We also undertook to make it so people who had just a bad year didn’t lose their house,” McCuskey said. “We created a payment process for the first time so people don’t have to pay their entire tax bill in one fell swoop. They can pay it over four payments in a year’s time. Those changes have made all of our redemptions go way up, which actually means less properties being auctioned in the first place. Because the best person to live in any house is the person that already lives there.”
McCuskey said all these changes combined will allow cities and counties to claim abandoned properties, clean up and beautify dilapidated structures, put properties in the hands of developers more likely to create new economic development projects or new housing and help current property owners get current on their taxes and keep their properties.
McCuskey, in his second term as state auditor, is a Republican candidate for governor in 2024.
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