NATCHEZ — Natchez Mayor Darryl Grennell said with the tough funding cuts the city has had to make this year, every potential source of income becomes paramount.

Grennell said approximately $100,000 promised to previous Natchez budgets sits uncollected when Natchez businesses choose to not pay personal property taxes for items including inventory, furniture and computers.

“We base our budget on those types of revenue, and when it is not collected it does affect us,” Grennell said. “We have to freeze certain departments in terms of spending and that can be devastating.

“If we don’t have enough end-of-year cash balance to make it to the new fiscal year, we end up having to take out loans, which can cost the city more in interest. It has a negative impact when it is not being collected.”

Adams County Tax Collector Peter Burns said approximately $357,000 total in past-due business personal property remains uncollected. Approximately $150,000 of that dates back to 2014 and earlier, and Burns said some of older debt likely would never be collected.

“Some businesses are closed and long gone from years ago,” he said. “Those amounts will stay on the books. There is no legal way to my knowing to remove them.

“Like any business, you are going to have some bad debt that is never going to be collected.”

For 2015 taxes due Feb. 1, 2016, Burns said his office collected approximately $7.7 million and approximately $207,000 is past due. The money collected is split between the city, the Adams County Board of Supervisors and the Natchez-Adams School District, according to the millage.

Adams County, which also collects and sets millage for the school district, would be eligible to collect the remaining approximately $157,000.

County Administrator Joe Murray said he budgets factoring in that only 98 percent of personal property taxes will be collected.

“There is absolutely no way you can estimate exactly what will be collected in personal property,” he said. “You have to account for (not collecting from all of the tax base) during the budgeting process.”

Burns said the taxing process starts with Tax Assessor Reynolds Atkins’ office. The assessor’s role is to get a listing of the inventory items that are supposed to be taxed yearly when a business opens.

From year to year, the assessor is required to audit 25 percent of the returning businesses, which self report any changes. Burns said Atkins’ office typically visits more than 25 percent of the businesses.

For small businesses the change may not be a lot and could go down based on the state’s depreciation schedule. For large businesses, it is more complicated.

“It is up to them to list what they have,” Burns said. “Of course if they get rid of the item and don’t tell us, they will still be taxed on it.”

Once tax renderings are complete, generally sometime in July homeowners and business representatives can come in and look at the assessments. Burns said very few take advantage of this option.

Based on the evaluations, the city and county figure up ad valorem millage rates, set public hearings and approve the budgets in September.

The taxes are to be paid by the public on Feb. 1.

“When the bills go out in December, that’s when people start getting alarmed and calling, ‘Oh, that can’t be right,’” Burns said. “We are not supposed to make changes because the boards have already set the millage rate and expect these collections.”

For past-due, real property tax, Burns said options exist to recoup the money. If someone has not paid, a tax lien sale will be held in August. This year, Burns said approximately $900,000 was collected in August.

With car tags, it’s hard to estimate how much remains uncollected out in the county.

“People are constantly buying and selling cars, so we never know about car tags,” Burns said. “As long as you own a vehicle, you are supposed to keep it tagged, even if it is just sitting in the driveway. When you move into the county, you are supposed to get it tagged within 30 days.

“But people are out there riding around with Louisiana tags and living in Adams County, and it’s not fair to the rest of us because it makes our tags more expensive. Car tags are always a moving target because of that.”

Several options exist to collect personal property taxes from a business.

For the $207,000 past due from this past year, Burns said his office is making calls and some are coming in to pay, others are not.

Another option is sending the debt to a collection agency. For example, in 2014, $300,000 in debt was sent to Receivable Solutions, and approximately half of it has been collected, Burns said.

However, that contract has been rescinded and another option is being pursued for collections, Burns said. Receivable Solutions still has some accounts for the companies currently making payments.

“By law, once it is past due, I can’t take a partial payment,” he said. “It is up to (Receivable Solutions) if they want to accept partial payments, but they can’t bring it to me until it is the full amount. And interest will continue to grow on the full amount.

“Some people think that’s not right, but that’s just the way it is set by state statute.”

Burns said typically the same 40 businesses are not paying the taxes each year of the approximately 1,300 businesses in Adams County on the tax roll.

“I know it is an unpopular tax and some people really loathe it,” he said. “However, it is the law, I don’t have any options. The majority of the businesses pay it every year, so why should others be allowed to slide by without it? Everyone needs to pay their fair share.”

Another problem that occurs in collections is when businesses close down. Burns said just because a business closes during the year doesn’t mean the owner can get away with not paying that year’s taxes. But Burns said once a business closes it can be tough to collect.

“We’ve also had instances where a business closed and didn’t inform anyone,” Burns said. “And they will end up being taxed the next year when they are not in businesses. I can’t take them off the roll if they don’t come up and take themselves off.”

Other, harsher options are available. Burns said his office could take businesses to circuit court. Burns also has the power to have a deputy post a notice on the door of the business shutting it down and the tax collector can sell the belongings.

“If that doesn’t garner enough money to satisfy the tax debt then we can file suit individually and or against the business,” he said. “I have not utilized the selling of belongings, and I have not filed suit.

“I prefer doing the collection agency route. However there are some businesses the collection agency has not had success in collecting from and they are still operating. It may come to me taking a harsher option.”

Grennell said government entities depend on all of the taxes to operate.

“I would encourage people to go ahead on and pay personal property taxes so we can keep providing the services that we need to provide in the city,” he said. “The money spent comes right back to you in the form of city services, fire protection, law enforcement, improving city streets, sidewalks and traffic lights.

“The taxes are given right back to you in terms of the services.”