Burlington Is Aggressively Pursuing Overdue Taxes and Fees

At first glance, two split-level rental properties in Burlington have little in common. One, on Mansfield Avenue, is a blue house with shingle siding in good repair. The other is set back from Colchester Court, its faded yellow exterior looking the worse for wear.

Peter Zuk, an executive at a title insurance agency, owns both. But he could lose them under a new city initiative to collect unpaid property taxes, which could lead to them being auctioned off. Zuk owes a combined $207,432 on the properties, with some of the debt dating back to 2020. When asked to comment, Zuk declined.

Following a pandemic-era moratorium on delinquent tax collection, the city is now calling in IOUs on nearly 40 properties. In each case, the owner has failed to pay at least $1,500 in taxes for more than a year. Owners must either make good on their taxes, agree to repayment plans or face a forced sale of their property.

Interest and penalties can compound quickly: Each late payment is hit with a one-time 8 percent penalty fee. Another 4 percent interest is levied if a property owner is late on their fourth-quarter installment.

The delinquent property tax collection is part of a broader effort by Mayor Emma Mulvaney-Stanak to collect money owed to the city on everything from neglected parking tickets to taxes that businesses owe on food, alcohol and entertainment.

All told, the city hopes to collect $1 million — revenue the mayor is banking on to help balance next year’s budget. The city is owed more than $1.9 million in property taxes that it can try to collect; debts more than 15 years old get written off per state regulations.

Not every official is on board. City Council President Ben Traverse (D-Ward 5) is concerned that turning up the heat on property owners in arrears is a bad look that won’t ultimately bring in as much money as the mayor hopes.

“The tax sale of homes that folks are living in is a pretty draconian response,” Traverse said, “and I’m anticipating there being a lot of pushback if that’s the direction that the city is ultimately planning on going in.”

State regulations aim to keep people in their homes, whether they rent or own, and that’s the city’s preferred outcome as well, said Katherine Schad, Burlington’s chief administrative officer. Most of the properties on the tax sale list are vacant, according to Bill Ward, director of permitting and inspections. For those that aren’t, he pledged to respect tenants’ rights.

In rental-heavy Burlington, just 40 percent of homes are owner-occupied.

Councilor Carter Neubieser (P-Ward 1) said that in private conversations, councilors on both sides of the aisle appeared to support stepping up collections, which he called “not a particularly radical idea.”

The mayor’s office promised an evenhanded approach. “It’s understandable that restarting tax sales after a pandemic-era pause may raise concerns,” said Jen Zakaras, the mayor’s deputy chief of staff. “At the same time, property taxes fund essential city services, and the city has a responsibility to collect them fairly and consistently.”

When property taxes go unpaid, local municipalities bear the budget impact. They must submit the education portion of property taxes to the state regardless of whether the owners have made good on their bill — meaning unpaid property taxes can hit municipalities hard. As Seven Days recently reported, unpaid taxes in some towns, such as Cambridge, have forced leaders to pare their spending.

As of mid-April, a city outreach program got the owners of 14 Burlington parcels who collectively owe $660,000 on repayment plans, avoiding tax sales. A lawyer retained by the city is notifying owners who owe an additional $674,000 on 20 parcels that they could be sold at auction.

Alan Bjerke is a Burlington attorney who sits on the city’s Board of Tax Appeals, which sets the taxable value for properties and hears the appeals if those values are contested. He also often buys properties at tax sales, including a dilapidated Queen City condominium he recently rehabbed into a rental.

He thinks the mayor should be even more aggressive in going after tax scofflaws.

“When you advertise and you tell somebody, ‘We’re going to sell your property for taxes,’ 90 percent of them pay up before you get to the tax sale,” he said. “So the fact that Burlington just doesn’t threaten means that people don’t bother, and they’ll keep their money in their pocket until the last possible second.”

Bjerke called out Stowe philanthropist Rick Davis, who owes nearly $50,000 in taxes going back decades on two properties that are part of the Pine Street Barge Canal Superfund site. In recent years, Davis has been a financial driving force behind the Let’s Grow Kids nonprofit, which successfully lobbied the legislature to institute a new payroll tax to help fund childcare subsidies.

In an interview, he said he refuses to pay what he owes for the Superfund properties on principle, arguing that the land is worthless.

“It doesn’t make sense to pay taxes on something that doesn’t have any value,” Davis said. “I always pay my bills on time. This is an exception, and I’ve spoken to the city at length about it over the years.”

Davis has been trying to sell an adjacent property, a less toxic brownfield, for years. The site is now being considered for cleanup and a 112-unit housing project. If it moves forward, Davis has pledged to donate his Superfund property to the city. Advocates with the group Friends of the Barge Canal believe it could become a new park within the rapidly developing South End.

Meantime, the city has put the Superfund properties on its tax sale list and is seeking to recoup $25,927 of what’s owed — or the amount of back taxes that have accumulated within the past 15 years.

Delinquent property taxes aren’t the only debts the mayor’s office is pursuing. The city also has plans to recoup about $800,000 in gross receipts taxes owed by restaurants, bars, hotels and entertainment venues. As of early April, 108 businesses owed the city, but just one — on the hook for about $15,000 — was on a repayment plan.

Traverse is concerned that, absent the same blunt instrument as a tax sale, the city will be unable to collect on this money owed. The city can’t put a lien on a business simply for failing to pay its gross receipts tax and is instead relying on improvements to its invoicing system and the addition of another employee to manage a more aggressive collections effort.

“I suspect that for a number of these folks that have not been up-to-date with the gross receipts, it’s because they’re struggling financially, and I imagine it could be difficult for us to secure that kind of back payment,” Traverse said. He has suggested the city look for administrative inefficiencies across departments and make deeper cuts instead of relying on pursuing this revenue.

Mulvaney-Stanak is also using the prospect of enhanced fees to collect debts. A city ordinance approved last year doubled what officials charge the owners of vacant buildings, to $1,500 each quarter — $6,000 annually. Mulvaney-Stanak has tasked Ward to get more aggressive in collecting.

In an October 2023 cover story, Seven Days documented some of the city’s most high-profile vacant buildings. One, the former Bove’s Café, closed in 2015 and remains boarded up, leading to some $10,000 in fines. But the owners, Rick and Mark Bove, have submitted plans to demolish the place to build housing there, which would reduce their quarterly fee to $200.

About 30 buildings in the city are considered vacant.

Ward pointed to a recent success story — a run-down, vacant home on St. Paul Street that sports a red-and-white X sign posted by the city to warn firefighters that the interior is so dangerously dilapidated that they shouldn’t attempt to enter, even if a blaze were to break out. After pressure from the city, the owner put the home up for sale earlier this year. It was scooped up within a month.

According to city records, the owner was past due on $25,964 of back taxes. City officials collected the debt as part of the building’s sale. ➆

The original print version of this article was headlined “Past Due | Desperate for revenue, Burlington is aggressively pursuing overdue taxes and fees”