Barbara Cannady for Burns Times-Herald

It is not illegal to postpone payment of property taxes and expect the accruing interest to be added to the final calculation. When your home or business is for sale, in fact, many would argue that strategy might be “good business,” depending upon the circumstances. Invest that debt in areas that would promote the sale. Taxes in full would be withheld at closing.  All is well, right? Well, maybe not.

In Harney County, steps leading to foreclosure can only be taken after the property owner has failed to remit the taxes for four years.  The Harney County Assessor’s office is now informing the Tax Districts (Burns, Hines, School District No. 3, ESD, Park and Recreation, Harney District Hospital and County) that one business’s withholding of their taxes for two years has resulted in a 1.3 million dollar shortfall in collections, which may impact budgeted expectations.

Harney County Budget Board member, Holly Smith, expressed concern regarding this matter in a letter to the County Court during their meeting on June 20, 2024. Smith contended that during the budget development process they were working with the full amount they expected to receive. An amount so large, by one taxpayer, can be problematic.  She requested that going forward, the Budget Board and Commissioners be informed of large presumed defaults prior to the budget process.

As in all budgetary processes, the smaller the budget the less room there is for flexibility, and any shortfall is amplified. Park and Rec comes to mind. Larger budgets can absorb or transfer funds easier as priorities are addressed.  Still there are considerations.  

Hines City Manager, Kirby Letham, notified his City Council and department staff of the situation on June 26. In a letter, he explained that the County Assessor provides a projection of tax revenue for each taxing district in October. It has been his practice to budget 90 percent of that projection. “So for the fiscal year 2023-24 year projected $550k to be received. We actually received $539K this year, so about $11K short. Now, this really didn’t have much of an impact on our budget this year, and in fact, because revenue was higher than projected in other areas,” said Letham.

Letham projected more of an impact on the 2024-25 budget, which was just passed. However, his expectation of a shortfall was followed by cautious optimism. “I think with cash reserves and watching the budget through the year, we should be able to continue with all of our planned projects.  Also, we have been really good about keeping spending overall under budget each year. We will want to watch this really close when it comes time to budget for the 2025-26 year too.”  

Good advice for all.