GovEase, a Madison-based company focused on moving county property tax auctions online, says it can reduce paperwork and bring more money to Leflore County.
But that might not be worth it, opponents of the online system idea argue, because it opens up the auctions to buyers who have no interest in the local community.
Every August, Leflore County hosts an auction of properties for which taxes have not been paid. When citizens don’t pay their property taxes, the county has to operate without money that it should have.
“The county has to be made whole,” said David Myers, vice president of business development with GovEase. “It’s going to be made whole on whatever is owed. Each lien on each delinquent property is on taxes that are owed.”
Property owners in Mississippi have three years to pay their taxes, plus interest.
Auctions are held yearly in each county for properties that are behind on taxes.
The highest bidders are paying the face value amount. Bidders also pay on the overbid, which is the amount bid over the face value.
“When bidders come in and bid,” Myers said, “and you and I are bidding against each other, if we bid over the top of that minimum bid, that money is considered overbid or excess funds. That money, also, goes to the county.”
If the owner of a property with unpaid taxes pays the delinquent tax, the winning bidder is reimbursed the money paid plus interest. However, if a property owner fails to pay the tax, the property is transferred to the highest bidder.
For in-person auctions like those in Leflore County, the auction can take one to two days.
Myers said GovEase can make the process much easier by providing the county the resources to make the auction process digital.
GovEase is the primary provider of its type of service in Mississippi. Myers said GovEase is now in 72 of Mississippi’s 82 counties and in 300 municipalities nationwide.
He said that using an online framework allows for more bidders, resulting in higher bids and more money for the county.
“Where we come into play, rather than having 15, 25, however many number of bidders, now we increase that amount significantly,” he said, “and we bring in more bidders, which is more competition for the local bidders.”
He referred to overbid rates. This term is used to describe bids that exceed the tax value of the property. For example, if the tax value of a property is $1,000 and someone bids $1,100, the overbid rate would be 10%.
According to information he provided, Leflore County’s overbid rates averaged 5% in 2018 and 4.7% in 2019, which he said is in line with those of other counties that were averaging 3% to 5% before using GovEase. After signing on with GovEase, he said, counties are now averaging an overbid rate of 10% to 12%.
GovEase has helped increase Sunflower County’s revenue by 72% in 2022 compared to 2018, adding more than $60,000 to the county’s general fund, according to Myers.
Washington County saw an increase of more than $84,000.
The company is paid by collecting 1.25% of the final sale.
“We make a percentage of the sale, but we more than pay for ourselves and make you guys more money than you did previously if you held it on your own,” he said, describing his pitch to counties.
As it stands, live auctions require entering information into a computer manually. A system like GovEase, Myers said, allows for all data to be entered automatically.
Myers said Leflore County Tax Collector Annie Conley invited him to present GovEase’s pitch to the Leflore County Board of Supervisors about two years ago.
At that meeting on July 6, 2020, Conley said she had concerns about having the tax auction in person due to the COVID-19 pandemic. She said that she would prefer to have it in person but the pandemic might force the county’s hand, which is why she invited Myers.
After making his presentation, the board deferred to the opinion of Conley, who recommended sticking with the in-person sales.
Speaking in opposition at that meeting was Floyd Melton III, a Greenwood lawyer. He said his family-owned company has participated in Leflore County tax auctions for years.
Melton presented a packet to the board explaining his concerns. Included with it were stories from WLBT in Jackson and the Orlando Sentinel about the problems created by online tax auctions.
The WLBT report on Aug. 5, 2019, reported that Hinds County Tax Collector Eddie Fair said online bidding leads to hard-to-reach out-of-state property owners who often neglect and write off the property.
Melton’s concerns then are the same they are today. He is concerned about the local impact of moving tax sales online.
He argued that while the county may receive a temporary bump in revenue, the majority of bidders who will be introduced thanks to the online component will have no interest in developing the properties they end up buying.
“My argument is those companies that are buying online aren’t going to care as much about the community as the companies that are investing in the community,” he said.
Melton said that while he is interested in making his money back, he also has an interest in ensuring a property is redeveloped and returns to the tax rolls with a higher rate.
“These bigger companies don’t have that heart,” he said. “They can’t have that heart because they’re answering to either a shareholder or a foreign investor that does not care about Jessie Smith that lives on Avenue J or whatever street. They’re not connected to the community.”
Myers said that those opposed to GovEase entering Leflore County don’t want the competition.
Melton disagrees, arguing that he already experiences plenty of competition at auctions without the online component.
Melton said the properties and bidding process are best left in the hands of local bidders: “In the long run, it’s better for the people of the community to spend that time on it so that there’s more control on a relatively local basis.”
- Contact Kevin Edwards at 662-581-7233 or kedwa-rds@gwcommonwealth.com.
