During 2020, nothing was “business as usual.” For the Commissioner of State Lands Office, that was most obvious in our auction schedule: it didn’t exist. We didn’t hold a single public auction last year, due to COVID-19.
That doesn’t mean, though, that we didn’t sell tax-delinquent property, or that we only sent a pittance of turnback money to counties. Our staff was as busy as ever, processing redemptions and post-auction sales.
2020 redemptions and sales
The number of redemptions did decrease slightly from the previous year. That may be the direct result of not holding auctions: many property owners redeem parcels either just before auction, or in the 10 business days following the auction.
In 2019, owners redeemed 13,178 parcels of property for $15.92 million. In 2020, that dropped to 12,714 parcels – just 464 fewer parcels, but the redemption value dropped by $1.9 million, to $14 million.
Post-auction sales increased, though. In 2019, we sold 3,860 parcels through the post-auction process. In 2020, that number jumped to 5,481 parcels – the highest since 2005, when we sold more than 7,000 parcels from the post-auction list.
Some callers told us they were using stimulus funds to invest in property. Some of the properties sold had languished on the post-auction list for years, so their prices were negotiable.
2020 certifications and comparisons
Fewer parcels of land were certified to us for delinquent taxes in 2020 than in previous years, but the number of mineral rights certified saw a sharp increase.
For acreage or lots, we received certification on 17,672 parcels – down from more than 22,500 in 2019. (That 2019 certification was the highest since 2010, when more than 25,000 were certified.)
Mineral tax certifications jumped to 16,666 last year – a record-breaking number of delinquent mineral taxes. In 2019, some 11,600 mineral parcels were certified. The previous record for a year was 12,140 parcels, certified in 2016.
That’s a total of 34,338 combined parcels certified last year: just over 1.5 percent of the state’s entire number of parcels. But that number has trended upward over the past two decades, almost doubling since 2001. That year, fewer than 17,500 total parcels were certified statewide.
Redemption trends
As mentioned, many parcels aren’t redeemed until it’s auction time. Although some property owners used (and continue to use) stimulus funds to pay delinquent taxes, others took advantage of an extra year’s grace to postpone paying those past-due amounts.
In 2019, the last year that we held auctions, 82 percent of eligible properties were redeemed. Those were properties that were certified for delinquent taxes in 2017. By comparison, just 56 percent of properties certified in 2018 have been redeemed, and a mere 39 percent of what was certified in 2019 have been redeemed.
We do note that many of those outstanding delinquencies are for mineral rights: more than 40 percent of the remaining 2018-19 certifications, and almost 80 percent of the outstanding 2017 certification.
We expect to see the redemption numbers for land parcels increase as their auction dates approach.
Turnback trends
We don’t send money to the counties as soon as we receive it. A schedule set by state law and policy governs when we pay turnback funds to the counties. Due to that schedule, we won’t see 2020’s full effects on county turnback until next year.
But in 2020, we were still able to send significant funds back to counties. The combination of redemptions and sales totaled $16.4 million that we distributed among the counties. That’s the most turnback since 2016, when counties received $16.8 million. (The record amount of turnback is $19.4 million in 2014.)
In addition, we distributed more than $1.2 million in excess proceeds to counties and over $87,000 to the state. This was for properties sold in 2016 and 2017.
Conclusion
Although 2020 was a chaotic year that nobody ever wants to see repeated, we were able to return thousands of properties back to active status through redemption or sales. That means tax dollars for each county’s roads, emergency services, schools, hospitals and libraries. We look forward to resuming auctions this year and continuing to do business with property owners and buyers.
