$2.5m in Uncollected Taxes: A Closer Look at the Ebb and Flow of Municipal Finance

There's been talk lately about Stoneham's uncollected taxes, with some suggesting that we cannot possibly consider an override until we have collected all outstanding amounts. That allowing these back taxes to remain uncollected is proof that the town is derelict in its financial responsibilities.

Let's look at what that actually means, and more importantly, who would bear the consequences of treating this as found money.

The Numbers

At the Override Study Committee meeting, members reviewed the specifics: as of June 30, 2025, the town had approximately $2.57 million in outstanding receivables across multiple categories.

The breakdown presented to the Override Study Committee included:

On the surface, this looks like a significant amount of money. But context matters.

Not a Budget Hole, But a Collection Cycle

As town staff clarified during the committee discussion, this figure 'represents a multi-year period, probably. So it's not just the bills from FY23.' This is critical to understand. Unlike our annual operating budget deficit, which recurs every single year and grows over time, outstanding receivables are part of the normal rhythm of municipal finance. There's always some amount owed, and there's always money being collected from previous years.

Let's put this in perspective:

That's a 96.8% collection rate across multiple years of billing cycles. For context, less than 2% of annual property tax revenue is outstanding — and that's spread across several years of collections, payment plans, and legal proceedings.

Town Administrator Dennis explained it this way: 'There is a natural rhythm to it. You know, we're owed this amount of money. We collect some from four years ago this year and then it just rolls into the next year.' He noted that historically, the town has been trending positively on collections, ultimately recovering 'a vast, vast majority of it.'

This is not a $2.5 million pile of cash sitting unclaimed that we could simply deposit into our operating budget. It's a rotating pool that exists in every municipality, where some residents pay late, payment plans are established, and collection processes work through the legal system over multiple years.

The Legal Process Already Exists

Stoneham doesn't ignore unpaid taxes. The town follows "a very defined legal process" for outstanding bills, which includes:

• Notifying residents of outstanding balances
• Applying interest on late payments (under state-regulated rates)
• Placing liens on properties
• In rare cases, taking properties through the tax foreclosure process when other collection methods fail

As town staff noted, "Usually the property is sold and then we collect outstanding bills during the sale of property. And usually it doesn't always get even that far."

The system is already working as designed. The question being raised isn't whether to follow the legal process, but whether to make it more aggressive.

Who Are We Really Talking About?

Here's where the conversation becomes deeply uncomfortable. When the outstanding receivables data was presented to the Override Study Committee, one member made an observation that should give us all pause: "What this is telling me... is our seniors, our families, our veterans, our disabled veterans cannot pay the current taxes that we have in this town."

Think about what aggressive collection really means. It means:

• Accelerating foreclosure proceedings on elderly residents on fixed incomes
• Placing additional financial pressure on disabled veterans already struggling with medical costs
• Forcing families facing temporary hardship into deeper crisis
• Taking homes from people who have lived in Stoneham for decades

The Uncomfortable Irony

The people who insist we cannot pass an override until we collect these unpaid taxes also position their opposition to an override as protecting vulnerable residents from tax increases. Yet suggesting we should crack down on unpaid taxes would hurt precisely the same people: seniors on Social Security, veterans with disabilities, families experiencing financial hardship.

You cannot simultaneously claim to protect vulnerable residents and advocate for more aggressive action against them. These are the same people.

While we don't know the exact circumstances of everyone with outstanding balances, we do know that Stoneham's collection process already includes safeguards and payment options--because forcing people into homelessness or foreclosure is not the kind of town we want to be.

A False Choice

Nobody is suggesting that $2.5 million doesn't matter or that the town shouldn't pursue legitimate debts through proper legal channels. But framing this as a dereliction of duty fundamentally misunderstands both how municipal finance works and what we value as a community.

The real questions before us are:

• Can we manufacture $2.5 million in immediate operating revenue from a multi-year pool of receivables that cycles in and out annually? No. This isn't how it works.
• Would aggressive collection provide recurring revenue to solve our structural budget deficit? No. Our deficit is permanent and growing; this is a one-time collection pool that already flows through the system.
• Who would pay the price for more aggressive collection? The most vulnerable among us: seniors, veterans, families in crisis.
• Is that who we want to be?

As one Override Study Committee member put it: "We've been hearing a lot about what individuals can afford when we talk about increasing taxation... but it occurs to me that at the same time we should also be asking what can Stoneham afford? ... The reality is Stoneham is hard pressed to afford to pay for the services that we need."

The Real Solution

Our budget crisis is structural, not administrative. It stems from Proposition 2½'s limits on revenue growth combined with costs that increase faster than 2.5% annually. You cannot solve a structural deficit with one-time revenue, and you cannot squeeze blood from a stone.

The town already pursues unpaid taxes through established legal processes that balance the need for revenue with compassion for residents in difficult circumstances. What we need isn't harsher collection tactics that hurt our neighbors. We need sustainable revenue that allows us to maintain essential services without forcing vulnerable residents from their homes.

That's what an override provides: a permanent solution to a permanent problem, without sacrificing our community's most vulnerable members in the process.

The choice isn't between fiscal responsibility and compassion. It's between a sustainable path forward and false solutions that would harm the very people we claim to protect.

This article was originally posted to SaveOurStoneham.org.