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Excess tax money sitting in account for nearly 23 years may benefit schools and other municipalities

An estimated $1.5 million dollars in excess tax funds have been sitting in an account for nearly 23 years
Posted at 11:23 PM, Dec 20, 2022
and last updated 2022-12-21 14:06:41-05

An oversight in the office that manages your tax money in Nueces County means some entities, like the county, city and school districts, could get some extra money.

That oversight, which went unseen for 23 years, means there's $1.5 million dollars of excess tax money sitting in a bank account.

There's an old saying by one of our founding fathers that states "In this world nothing can be said to be certain, except death and taxes."

While the former has a certain permanence, not paying taxes can have a ripple effect

The taxes we are talking about today are property taxes. Let's say you own a house, but if you don't pay your taxes, the government can seize your home. The house is then sold on an auction to pay for the taxes you owe. But let's say you only owe $20 thousand dollars, but the house sells for $200 thousand. That's a difference of almost $180 thousand dollars, minus court and sales fees or paying back creditors. That excess money goes into the civil registry bank account, but what happens to the funds after that? Well, the district clerk's office has to send out a letter to the property owner to let them know they are eligible for the extra money...but what happens if they don't respond is where taxing entities can benefit.

"According to the statute, there's a 2-year notification process that has to go before they can turn these monies over. So, if the person hasn't responded within 2 years, then those moneys can be distributed back, the excess proceeds back to the taxing units," said Kevin Kieschnick, the Tax Assessor for Nueces County.

That's at least how things are supposed to work, but as it turns out from 1985 to 2008, there were at least 149 cases where the resident was either not notified...or they were and the money was not distributed to the taxing entities.

The mistake was made before district clerk Ann Lorentzen was elected but is something she is working to correct.

And that money could go to entities like your school district.

"It would be to CCISD, it would be the City...it would be some of those taxing entities," said Lorentzen.

Steve VanMatre, superintendent for Tuloso-Midway ISD, says that funding of any kind is a big help to schools, as they are often working with razor thin budgets.

"When you look at your tax bill, the ISD taxes, as everyone knows, taxes at a much higher rate per hundred-dollar valuation, than any of the other taxing entities."

The funds just sitting in the civil registry account were brought up by the county auditor's office.

Dale Atchley, the Nueces County Auditor, sent in this letter on June 16th to the district clerk, asking her to deposit over 571 thousand dollars into the county treasury by July 1st.

Using this spreadsheet his office compiled of old excess proceeds. It claims that the county is owed that 571 thousand with the city getting a little over 10 grand.

The big issue some of you may be pointing out is the obvious lack of any other taxing entity.

What the county is owed is actually owed around 30 to 33%...Or a little over 188 thousand.

Lorentzen did not comply with the county's request.

"Mrs. Fuentes tried to say that Dale and her would have our backs if anything happened and we went...noooooo!"

In a written statement to 6 Investigates, Atchley wrote in part "We have asserted a total amount of excess proceeds, not the amount due soley to Nueces County. That total amount is from records previously provided - equaling the total amount of excess proceeds...the amount due to each taxing entity is still being determined."

"On the surface it seems to me, with the limited information that I have, that there's an overreach there, and that concerns me," said Superintendent VanMatre.

To be fair, this could have been a misunderstanding of the property tax code by the county auditor...a mistake that could have cost school districts hundreds of thousands of dollars they desperately need.

"At TM, if we don't receive additional funding, there will be programs that will certainly be on the chopping block. This wouldn't solve the issue, but it certainly would help," said VanMatre.

For now, the funds remain in the Civil Registry while government officials decide what entities get what percentage of each account, and the District Clerk tells 6I it could take a long time for her already strained staff to get through every case.

District clerk Ann Lorentzen tells us it will take her office six months to review these tax cases.

And while it is not Kevin Kieschnick's job to help resolve this issue... He says he will help the county fix it.

Lorentzen also tells us that if homeowners have not been notified that these excess funds exist, given the length of time that has lapsed, her office will not send notices out.

But it will seek the opinion of a district court judge, to either release funds or determine if notice must be sent.

As always we will stay on top of this story and bring you updates when we have them.

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