fV 7T ws UNITED STATES DEPARTMENT OF AGRICULTURE . Bureau of Agricultural Economics- ■ Division of Agricultural Finance 'STTOR^ January 20, 1936. TAX DELINQUENCY OF RURAL REAL ESTATE IN SEVEN NEW J3RSST COUETIES, '1923-33 Rural real-estate tax delinquency on the 1932 levies in seven New Jersey count ie si/ involved over 500,000 acres out of a total area of 1.UU3.000 acres. The 133 2 figure represents an increase of SI percent over the acreage delinquent on the 1923 levies. During the same period the amount of taxes delinquent increased 91 percent. Much of this delin- quency is of a chronic character. Not only did delinquent acreage increase but delinquency per acre also increased. At the end of the 1932 tax year the period of delinquency, for all properties then involved, averaged 2.1 years . During the five years 1323-32, tax certificates, or tax liens, were sold against only 3 percent of the delinquent acreage. 2/ By the end of 1931 about one-third of the acreage delinquent on the 1923 and later levies had been cleared and one-fifth of the certificates had been redeemed. The delinquent area in 1923 equaled 19 percent of the total area that ~»rt of/ seven counties covered ^y the study. The corresponding f igetre in 1932 V7QG 35 percent. Comparison of delinquent area with total area must be made with caution because of the publicly-owned land in these counties, and further because considerable amounts of the privately-owned land are held in properties of less than 3 acres each, or lie within incorporated places, or are specifically exempted from taxation. These special classes are not covered by this study. Relative increases in delinquency varied widely among the seven counties and between types of property. The greatest percentage increase in delinquent general taxes for the period was 2,350 percent, in Monmouth County, and the least increase was 50 percent, in Hunterdon County. It should be noted, however, that the figures for Monmouth County represent only k of the Uo townships in the county and that the increase was from $750 in delin- quent taxes in 1928 to $2l,97U in 133 2 . The delinquency in both counties was largely on f°rm land. I n 1932, 30 percent of the area reported as - delinquent in Monmouth County was farm land while in Hunterdon County the This survey was made under a Civil Works project administered by the Bureau of Agricultural Economics, assisted by the Agricultural Experiment Station of New Jersey. Reports have now been issued for selected counties ir. all States. See note page 5 for a further description of the study, l/ Burlington (19 of 31 townships), Cape May, Cumberland, Hunterdon (12 of lU townships), Monmouth (U of Uo townships), Ocean (6 of 13 townships) and Somerset (9 of 12 townships) . 2/ Estimated from reports for three counties. 2. corresponding figure was tyO percent. For all seven counties the area re- ported delinquent in 1932 was distributed by typos as follows: 60 percent in farms, 11 percent in forest and "cutover" forest, and' 29 percent in all other types. Special assessments in the seven counties are of very minor impor- tance both as to acreage involved and as to amount of assessment per acre. Usually they consist of assessments for the maintenance of lighting or fire protection districts. In both 1923 and 1932 the acreage delinquent on special assessments was approximately 5 percent of the total acreage delin- quent. In 1931 » when the amount of delinquent special assessments was the greatest, it was less than 2\ percent of the total delinquency and in 1928, when the amount was least, it was about one percent of the total. Payments made during the period cleared 30 percent of. the acreage which had become delinquent on the levies of 1928 to 1931 » and reduced the total delinquency of those years by 77 percent. The larger percent-? age for taxes than for acreage is explained by the fact that two or more levies were delinquent on many of the properties cleared, and by the fur- ther fact that on many of the delinquent properties late payments contin- ued to be made without ever entirely clearing the properties. Over 71 percent of all properties reported delinquent during the five years were delinquent on the 193 2 levies. Of these the largest number 1 began with the 1928 levies, the first year covered by the study. The next largest group began with the 193 2 levies, and the third group began with the 1929 levies. The large number of properties appearing in 1923 (more than twice the number appearing for .the first time in 1932) indicates the probabil- ity that a large part of them had. been delinquent even before that year* Sales of tax certificates, or tax liens, in three counties^./ during the years 1928 to 1932 covered only l6,9Sl acres; compared with 209, ll4 acres which became delinquent. k/ At the end of the calendar year 1931 the acreage in these counties on which delinquency had not been terminated totaled 134,789 acres, all of which was eligible for sale by July 1, 1932 if not paid in the interim. The corresponding figure for the seven counties is ^3^,965 acres. On the other hand, the number of acres against which tax certificates were sold annually .increased lU2 percent from 1928 to 193 2 , compared with an in- crease of 81 percent in acres delinquent. More than nine-tenths of the certificates sold were "purchased" by the municipalities. The percentage was 9 2 in 1°23 and <$± in 193 2 . This indicates that few individuals were willing and able to pay the delinquent taxes. jj Tax sale data available for. .only Hunterdon, Monmouth, and Ocean Counties. 4/ Includes those carried over from years previous to 1928. 3. For the 5-year period about' 20 percent of the properties were re- deemed, all of the redemptions, except one, being from public buyers; that is, from the municipalities. The redemptions were most numerous in the "farms" and "miscellaneous" type groups, and within each type group the as- sessed valuations averaged slightly higher for properties redeemed than for those unredeemed. Few properties become eligible for t a x deeds because of the policy of many New J e rsey municipalities of postponing tax sales until the taxes have been delinquent for a year or two. In the area covered by this study no tax deeds were reported given from 1$2S to 1933* The situation discussed above, and shown by the following tables, indicates a rapid increase in rural tax delinquency. It is apparent, however, that only a minor part of such delinquency led to the sale of tax certificates against the property. In many cases the taxes are paid soon after becoming delinquent. Many of the remaining delinquencies are allowed to continue with- out further action on the assumption that they will be paid or because there are no private bidders for the certificates. The following tables show summaries for the seven New J e rsey counties. Total land area, area in farms, and the number of farms for each of these counties, for the seven counties combined, and for the State are shown in table 1. Totel delinquencies reported for the seven counties combined on the levies of each year 1$2S to 1332 are shown in table 2. A total of the amount of taxes reported delinquent for all five years can be obtained from table 2, by adding together the figures for all years, as each of these apolies only to the levy of the year shown. This cpnnot be done in the case of the number of properties, or number of acres, or the assessed values of the delinquent properties, because any property may have been delinquent in more than one of the years shown. Such a property would be included in more than one of the annual totals, resulting in duplication if these items were to- taled for the period. Figures for "new" or first-year delinquencies (that is for delinquencies originating, or beginning, with each tax year from 1923 to 1332) for the seven unties are shown in t^ble 3* They represent properties which have not be- fore been delinquent during the period studied. For the 1323 levies the fig- ures in table 3 should be identical with those in table 2, because 1923 is the first year covered by the study, and all delinquencies reported for that ye?r apoear here as new delinquencies. For the years following 1923 the new delinquencies should be less than the total delinquency figures given in table 2. They show the rapidity with which newly delinquent properties were added to thosaalready delinquent. The extent of delinquency in years prior to 1523 may be judged somewhat from the amounts and trends here shown for the ycrs from 132S to 1S32. Delinquencies terminated during each tax year from 1523 to I53I for the seven counties are shown in table U. The term "delinquencies' terminated" u. is hero used to indicate that the properties represented did not again become delinquent during the period studied. For economy in tabulation the termination of delinquencies in 1932 has not been tabulated. Delinquencies paid during the period classified both by year of levy and by year within which paid are shown for the seven counties in table 5. Delinquencies paid differ from delinquencies terminated in cases where pay- ment of the delinquency on a given year's levy did not fully clear the prop- erty because some other year's levy was still delinquent, and in cases where, though fully cleared, the property again bec?me delinquent during the period covered by the study. Classification of delinquent properties by the period, or duration, of delinquency is shown for the seven counties- in table 6. Each figure in the body of the table represents the number of properties which first be- came delinquent in the tax year designated on the same line at the left margin, and which were last delinquent in the tax year designated at the head of the column in which the figure is shown. As noted above, for I92S the first, or new, delinquencies are actually totals. A summary comparison of individual county data is made in tables 7» 8, and 9. Tables 7 and 8 show by counties selected items of the data given in tables 2 and 3 for the seven counties combined. The number of acres and the amount of general taxes delinquent on each levy from the 1923 to 193 2 * in each of the seven counties, are shown in table 7. The number of properties and number of acres first delinquent on each levy -from 1928 to 1932, in each of the seven counties, are shown in table 8. A part of the delinquency shown in tables 7 and 3 had been paid by the time when this survey was made. The number of acres and the amount of general taxes still delinquent in each county when the records were taken are shown in table 9« Tax certificates sold during the years from 1928 to 1933 an ^- still unredeemed when the records were -taken, for three counties combined, are shown in table 10. They are classified by public and private buyer. Tax certificates sold to public buyers but later redeemed' are shown in table 10a. In addition, one certificate representing IS acres and $97 in general taxes was reported redeemed from a private buyer. Table 11, "tax deeds given" is omitted as no needs were reported given during the period covered by the study. Certain data from preceding tables are brought together in table 12, permitting a summary view of the development of delinquency during the period covered. Starting with 1928, and cumulating the number of new delinquencies minus the number of delinquencies terminated, gives yearly totals in excess of the total delinquencies s;iOwn. The excess is recorded in the column headed "temporarily cleared"'. For 3. given year this excess represents the number of properties which were temporarily cleared during the year in question, but were delinquent on at least- one earlier and one later levy in the period covered. Owners of these properties managed to pay their delinquent taxes and to pay at least one levy before it became delinquent, but later they again fell into arrears. Thus in each year for rhich both items can be shown the delinquencies paid exceeded delinquencies tern.inated. 5. The tables show that much of the delinquency in the' seven counties was chronic and that the delinquent acreage was increasing. Also the aver- age period of delinquency was increasing in length. In no year from 1928 to 1932 did payment of delinquency equal in amount, the delinquency on that year's levy. The additional, or new, acreage becoming delinquent year by year fails to account for the increase in the amount of unpaid delinquency. This is indicated by the accumulated unpaid delinquency per acre, which at the end of each tax year was as follows:$l .59 in 1928, $2.22 in 1929, $2.5*1 in 1930, $2.89 in 1931, and $3.28 in 1932. The 1928 to 1932 increase is 106 percent.. The delinquent acreage carried over from, year to year indicates that at the end of; the 1932 t^x year the acreage period of delinquency was 2.1 years. This figure would be raised somewhat if those -properties first delinquent on the 1932 levy were deducted. This suggests that a consider- able part of the delinquency in the 1932 tax year had continued year after year without payment. It is delinquency which threatens to become permanent, representing not slowness of payment but a complete stopping of payment. The number of tax sales indicates, however, that in relatively few cases was procedure started to dispossess the owner of title: to the land. The present report is the forty eighth of a series of State reports on the subject. The Bureau previously issued a brief summary of preliminary tabulations for 1,53° counties in 31 States. Field work was carried on in more than 2,000 of the 3.071 counties in the country. The State reports represent detailed tabulations now being completed for about 700 counties in the U8 States. These tabulations have been made by the Bureau, with a gr^nt of funds from the Federal Emergency Relief Administration. The first objective of the study was to make available trustworthy data on the amounts and trends of rural real-estate tax delinquency since 1928. The final objective will be to analyze the causes and significance of this delinquency. \ The delinquencies reported represent properties .of 3 acres or more, unplatted and lying outside of incorporated places. The "properties" .repre- sent the "parcels" carried on the tax records, and thus the number is .somewhat larger than the number of complete "holdings" which were delinquent. In some cases the holding of an individual or company is assessed and taxed in more than one parcel. "Tax delinquency" as used here indicates failure to pay taxes before the date when penalty is applicable for non-payment. In New Jersey, prior to 193^» property taxes levied in any year were due (penalty date) in equal installments on June 1 and Decemberlof the same year. (Beginning with the 193^ taxes payments are due on February 1, May 1, August l.and November 1.) After June 1 one-half of the tax levied was subject to .interest at a rate fixed by the various municip alitiosbut limited by State law to a maximum of 8 percent per year. The remaining ha.lf was subject to a similar penalty after December 1. The State law permit ei the municipalities to sell tax certificates, or tax liens, against real estate still delinquent on July 1 of the year following that of levy. A certificate may be purchased by a pri- vate party or by the municipality, and if the property is not redeemed within two years from the date of sale, the purchaser has the right to institute foreclosure proceedings the same as in the case of a mortgage lien. 6. Table 1.- L?nd area, farm area, and number of farms, State of New Jersey and seven New Jersey counties Land area \ Number County of ; Total \ In farms 1_/ ; farms l/ : 1,000 acres : 1,000 acres : Thousands Burlington 2/ I 260 : 128 : l.U Cape May : 170 : 30 : 0.1+ Cumberland : ! 320 : 128 : 2.6 Hunterdon j/ ; 236 ! 179 : 2.2 Monmouth 4/ i 117 : 65 : 0.8 Ocean ^/ : 178 i 23 : 0.5 Somerset 6/ ! 167 , 95 : 1.2 Total seven counties ; 1,1+1+8 ; 6U8 : 9.1 State total jj : M09 1 1.75S : 25. 1+ \j Farm area and number of farms from the 1930 C e nsus of Agriculture. 2/ 19 of 31 townships. 3/ 12 of ik townships. k/ k of Uo townships ^>/ 6 of 13 townships. 6/ 9 °? 12 townships. JJ Includes lU counties for which delinquency data are not available. Table 2.-. Total delinquency of rural real-estate taxes, seven-county total, by year of levy, 1928-32 Year of levy : Properties involv< 3d | Amount : Number : Apres : Assessed : valuation of taxes | delinquent 1928 1929 1930 1 1931 1 1932 i : Number : 4,938 5,805 G,6iU i 7,881 , 9,1+22 : : Number : 278,312 316,018 382,1+85 « U3l4,U36 i 503,1+1+1 ! 1,000 dollars : 10,913 ! 12,781 i 1^,953 ! 17,363 : 20,859 - Dollars 1+29,797 536,5^8 61+2 , 563 710,256 821,563 Table 3 •- ^ Tew delinquency of rural -real-estate taxes, seven-county total: first delinquent on the levy of the year designated, 1928-32 7. Year | Properties involved : Amount : of taxes of levy [ Number [ Acres . : Assessed valuation ! delinquent 192S 1/ 1929 ■! 1930 ■! 1931 i 1932 : : Number : : ^,933 2,172 •1.3U3 . ; 2,032 : 2,214 j : Number 278,312 I 120,171 . 121, S5U : 99,322 : 107, 55^ : 1,000 dollars 10,913 5,305 ^,537 i U,U5U | U.S52 i : Dollars 429,797 201, 134 172,215 lG.6,506 179,335 l/ The 1923 figures represent all rural properties delinquent on the levy of that year. The carry-over from previous levies is not known. Table U.- Terminated delinquency of rural real-estate taxes, seven-county total: last delinquent on the levy of the year designated, 1922-31 Year Ofi Properties involved Amount of taxes delinquent levy : Number : Acres j Assessed : valuation 1923 1929 1930 ; 1931 ' i i Number : 535 : 699 : 732 913 i Number ! 37,735 49,734 j 53.551 : 1,000 dollars i 1,323 1,710 : 1,931 1,933 ' Dollars ^3,757 62,796 76,9^9 72,970 3. Table 5«- Payment of delinquency of rural real-estate taxes prior to April 1334, seven-county total, by year of levy, and by year of payment, levies of 1923-32 BY YEAR OF LEVY : Pr. jperties involved Amount ■ Number : Acres : Assessed : valuation of taxes . delinquent Year of levy: ; Number t Number . : 1,000 dollars : Dollars ' : ; 192S : '.3,820 : 216,831 : 9,113 : 365,421 1929 : 4,431 1 2U3, S06 : 10,331 : 456,102 1930 i 4, 605 ! 269,563 : 11,306 : 495,153 1931 : 4,695 : 255,1+60 : 11,701 : 459,730 1932 : -3.735 206,276 : 10,112 : 377,670 BY YEAR 0E PAYMENT Year paid: 1928 ; 2 : 59 ! 3 ! 110 1929 : 2,636 : 156,129 < : 6,913 : 269,250 1930 : 3.359 : 202,092 ; 9,035 : 371,919 1931 1 4,103 l 2)+6,072 ! 10,431 : 423,751 1932 : 4,506 : 236,3^7 1 10,717 ! 425,415 1933 ! 4,532 1 23^,577 l 11,339 : 432,l6l 193H I 360 : 16,601 : 779 : 32,365 Unknown ; •1,256 : 99.030 : 4,374 : 139,495 Released l/ : ' 32 : 362 l 72 : 3,650 1/ Includes those released or abated. Table 6.- Number of delinquent properties, seven-county total, distributed by period of delinquency,' 1928-31 !_/ Levy first delinquent Properties last delinquent on levy of:' 1923 1929' 1930 1931 1923 1929 1930 1^1 535 392 265 152 365 232 l4i 133 347 1/ Distribution cannot be made for 1932. Cable 7.- Tot a l delinquency of rural real-estate t?xes, seven counties, by county and "by year -of levy, 1923-32 County Acreage General taxes : 1923 !' 192S : 1930 : 1931 ! I532 : 1323 ! 1929 :' 1330 : 1531 : 1932 •1,000 : 1,000 : 1,000 : 1,000 : 1,000 : 1,000 : 1,000 : 1,000 : 1,000 : 1,000 :?cres ■^cres : acres : acres •acres tdolls. •dolls. : dolls. •dolls. : dolls. Turlington ' 65 • 63 : 33 ! SS ; * : 109 : 123 : 144 • 160 Cape May ! 1 2 3 31 : *, 42. . 51 : 16 • . 2 3 : 25 23 : 37 Cumberland : 70 : 34 104: 117- 133 : 113 : 151 133 203 233 Hunterdon : Gk 1 72 : 31 37! S3 95. ! 113 130 135 142 Monmouth 1/ 1. 1 3. 12. 1 1 2, 6 22 Ocean : • 3 11 , 20: 3^: 50. : '6 9. 15. 24. 3S Srmerset : 41 49. : 52 62 : 71 100 ! 131 154! I65: 190 Total 271. 316 332, 434! 503: U30: 537' 643' 710: 322 1/ Less than 500. Table 3.- Ne^v delinquency of rural real-estate taxes in seven counties: first delinquent on the levy of year designated, ' by county and by year of levy, 1923-32 Properties Acres County : 1923 : 1529 : 1930 : 1931 1 1932 1923 : 1929 ! 1930 ! 1931 : 1932 : lumber Ifomber "ur.be r ; "umber [Number 1,000 acres a, 000 :acres il.OOO acres :1,000 acres :1,000 7U5 327. 2UG : 300 •333 i :acres Burlington 65 22, 25. 19 : 17 Cape May : 423 195 161 : 156, : l?7: 23 11. 10, 3 • 14 Cumberland : • 1,321 723, 637: : 639 ! 633: 71 39. 41! 24 • 21 Hunterdon : 1,057 • . U72 327. : 237. 237: 64: 25. • 19: . 16. 14 Monmouth : 13, 11. 23: S8« 166: 1/ 1/ 1: 3. 9 Ocean 6U: 55. 101, : l63j 275: 13: 4: 9: 13: 13 Somerset 305, 35U; 291 : 35U: 327: 42: 19: 16: 16: 15 Total U 07.- 2,172 1.843 2,032 2,2lU ; 273: 120: 121: 100: 103 f7 Less trian 500. 10. Table 9.- Unpaid delinquency of rural real-estpte taxes April 193^ seven counties, "by county and by year of levy, 1928-32 Acreage General taxes County : 192S : 1929 : 1930 : 1931 : 1932 ! 1923 : 1929 : 1930 : 1931 : 1932 : 1,000 : 1,000 : 1,000 : 1,000 : 1,000 :1,000 : 1,000 : 1,000 : 1,000 : 1,000 'acres :acres [acres : acres : acres' [dolls. : dolls . :dolls., : dolls. :dolls. Burlirg ton • 9 10, 26 i 36 : 50'- 17 : 17. ! uo 1 •' 66 \ 96 C?pe May j 3 : 11 13 : 23. : 35'- 3 : •• 5 : 6 13 : 23 Cumberland ; IS : 27 3* ! 5* : ZZ\ 15 : 22 : 4 5 : 7^ : 13U Hunterdon j u« : 6 11 : 20 : 4 3 ': '5 : ■ 3 : 15 ' : 30 [ 63 Monmouth'- : ■ 1/. 1/ 1 4. : 12-: 1 : 1 : • 2 : 6 ; 22 Ocean j 7: 10 : 15 1 29: : H2-: 5 : 7 : 12 • 21 i 32 Somerset ; : 3, •8: 9 15' ; 27:: 18, 20 '27: ■• Ui 7 1 * Total : :■*! 72 i 113 179' ! . 297: 6U: SO: \ 1*7: • 250: uuu 1./ Less- than 500 Table 10.- Tax certificates sold, and still unredeemed April 193^, three-county total, by type of buyer and by year of sale, 1928-33 Private buyers Public buyers ' Year • Ge meral General Number ; Acres : ^ ;axes ! Number ' Acres | taxes : Number ! llumbcr : D< )llars Number "umber : Dollars 1928 .. g ! 190 : 270 ., 76 , : : 1,960 , : 2,753 1929 12 308 : 316 39 : 2,032 • u ,375 1930 : 12 [ • 29U : 39^ .- .57 • 2,973 . 6,906 1931 - : .6 . 32 : 205 . :53 I 2,93^ : 8,6iU 1932 • i .6 . ; 13U : 253 .i :9^ i 5,993 ! 13,300 1933 : M : 25 : 77 -i :76 : • 3. 5S3 : 4,094 u. Table 10a.- Tax certificates sold to public buyers, and redeemed prior to April I93U, three-county total, by year of sale, 1928-33 l/ Goner al Year ; Number : Acres taxes ! Number ! Number : Dollars 192S I 17 : 83S ; : 1,188 1929 21 : 1,089 ; l,96l 1930 20 ! 1,126 : 2,277 1931 ! 17 : 907 1,857 1932 - 13 : 1,091 : 1,602 1933 i 9 : 608 : : 1,071 1/ In addition one certificate representing 18 acres and $97 in taxes was reported redeemed from a private buyer. Table 11.- Tax deeds given (No tax deeds given during period studied) Table 12.- Number of delinquent properties, tax certificates and tax deeds summarized from tables2 to 11 3y year of levy By cal< 3ndat year : T.ax : Tax Year : Newly : Delin- : Delin- : Total : Tempo r- : certif- : certif- : delin- : quency ! quonc:/ : delin- : arily : icates : icates : quent : termi- 1 nated : paid : quent [cleared : 1/ : sold : 1/ : redeemed : H 1928 : • U.938 : 585' : 3,820 ^,938. 8k 17 1929 ! 2,172 ! 699 : U,H81. 5.8Q5 : 720, 51 21 1930 : L8U3 : 782, 1 U,605 6,6lU, 1,055! I 69 ! 20 1931 ! 2,032 : 918 ^,695: 7,681: 1,038: 59 1 17 1932 : 2,2lU 3,735- 9,422; 100 . Ik 1933 ! I ■ * 80 : 9 1/ Number of properties clear for the year in question, but later again delinquent . 2/ Includes those later redeemed. 3/ Classified by year within which sold. UNIVERSITY OF FLORIDA 3 1262 08929 9175 rr-j ■ .\ '- -' ■ ' >*<-