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May 12, 2008

S-986/A-2178, as amended Private Collection of Property Taxes



Dear Mayor:

Previously, we informed you about legislation, S-986/A-2178, whereby municipalities and other government units would be statutorily permitted to place a surcharge onto outstanding fines, costs and other charges owed by delinquent debtors. This fee, in an amount not to exceed 25%, would be strictly dedicated to off-set the cost of hiring a private debt collector. In this way, the onus falls to the delinquent debtor to pay the collection fee and the property taxpayers will be held harmless.

However, we are dismayed to learn of recent amendments to S-986/A-2178 that would expand the list of items to be collected by the private collection firm. In addition to outstanding fines, costs, surcharges and other penalties, the private collection firm is allowed to collect delinquent taxes, fees or assessments.

The League is adamantly opposed to the inclusion of property taxes in this legislation. The provisions of the current tax sale law are sufficient to collect property taxes. The majority of municipalities in the State have a 95% or greater tax collection rate. Moreover, most municipalities sell all of their tax liens to outside buyers as this practice provides a positive cash flow to the municipality.

We are also concerned that methods employed by some collection agencies might actually scare senior citizens into paying delinquent taxes and unnecessary fees to a third party collection agency.

As amended, the League rescinds its prior support and now goes on record in opposition to

We urge you to contact your Trenton delegation and voice your opposition to S-986/A-2178, as amended.

Thank you.


                                                                        Very truly yours,


                                                                        William G. Dressel, Jr.
                                                                        Executive Director





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