Ocean City Council adopted a resolution that provides property tax relief due to COVID-19 for property assessed greater than $620,000 for six months. Ocean City taxpayers with property valued at less than $620,000, will receive no relief. Below are the letters sent to Ocean City Mayor Jay Gillian, from FIT, Fairness in Taxes President, David Breeden.
April 23, 2020
Dear Mayor Gillian:
I am writing in regards to the proposed resolution that will adjust interest rates on delinquent property taxes as a result of the COVID-19 pandemic. You should be commended for taking steps to reduce the short term financial burden being placed on struggling taxpayers by this extraordinary event.
However, the resolution as prepared will not provide any financial relief whatsoever to certain property owners.
As you know, currently, interest rates on delinquent property taxes are 8% on the first $1,500 and 18% on any amounts in excess of $1,500. Under the proposed resolution, the interest rate on the first $1,500 would remain the same at 8%, while the interest rate for delinquent taxes in excess of $1,500 is decreased or lowered by 10 points to 8%.
This resolution provides no financial relief to a property owner whose home is assessed at or under $620,000. If those property owners are late with their tax payment, they are still charged 8% interest; no change and no relief.
This represents a glaring oversight that needs to be adjusted so that the city treats all property owners equally along with affording the same financial relief on delinquent property taxes due to the virus.
Consideration should be given to what many towns are implementing and that is simply providing a thirty (30) day grace period for the tax payment due May 1 with an interest rate of essentially zero percent. This affords the same level of financial relief to all taxpayers along with providing time for the city to assess how the pandemic is impacting tax collection.
If tax collections are adversely effected by the ongoing pandemic, then further adjustments can be made at a later date based on actual tax collection rates versus anticipated tax collections rates.
For your easy reference, I have attached a resolution from a neighboring communities as an example of this fair and appropriate approach.
Regardless of the city’s eventual position on this matter, it is critical that the city treat all taxpayers fairly and equally during this challenging time. The proposed resolution as written does not accomplish that and therefore changes should be made to reflect equal and fair treatment for all taxpayers.
OCNJ FIT - April 2020 Delinquent Tax Resolution
Here is letter from Monday, April 27, 2020
Dear Mayor Gillian:
I had an opportunity to watch the Thursday, April 23, 2020 city council meeting and wish to offer some remarks and observations, especially regarding the resolution that established rates of interest for delinquent taxes.
Your opening remarks at the start of the meeting were most appropriate. I am confident that you are making decisions during this pandemic that in your wildest dreams you never thought you would have to make, such as closing the boardwalk and beach.
These must be heartbreaking choices as you know all too well the adverse impact they will have on the livelihoods of many in Ocean City, but they must be made.
In regards to the resolution that adjusted interest rates, I wish to make the following comments in response to the city solicitor’s remarks made at the meeting on the matter:
- Fully agree with her statement that balancing the needs of taxpayers with the demands of the operation is not easy. Striking a balance between competing interests is a challenge considering these difficult times.
- Understand that local governments do not have the legal ability to change dates associated with tax collection. However, municipalities can change interest rates which effectively affords additional time for property owners to pay their taxes. While Mrs. McCrosson referred to this as an “end run” around the statute, I would refer to it as an innovative and creative response in an extraordinary time to provide short term financial relief to taxpayers who are experiencing financial hardships not of their making.
- While Mrs. McCrosson is a capable attorney, I would urge her to use caution when editorializing on whether an amount of savings is significant. It is easy to say $120.00 is not a significant amount while still collecting a taxpayer funded check. However, if you are unemployed, $120.00 or any portion thereof would be important. Even a few dollars could be helpful as it would be enough money to put fuel into your car so you can wait a few hours in line for food bank donations. Attached for your review is an April 22, 2020 article from the Atlantic City Press on a recent food bank event in which people waited hours for food donations. (ATTACHMENT “A”)
- If you believe I am engaging in hyperbole regarding the struggles of some residents, please refer to the attached letter from the Ocean City Intermediate School Principal, dated April, 2020, in which he states, “We are aware that there are families now experiencing financial difficulties that prior to this pandemic were not.” So it is not just me saying some Ocean City residents are financially hurting, your school officials are stating and acknowledging the same. (ATTACHMENT “B”)
- Mrs. McCrosson referenced the April 22, 2020 letter from the Tax Collector and Treasurers Association of New Jersey, which is attached for your review as it is quite the read. Please keep in mind that the mission of this organization is to look after the interest of mainly Tax Collectors, not tax payers. This association advocates doing nothing in response to the pandemic. In fact, the Tax Collectors Association believes almost all individuals should be able to pay their taxes. The exact statement on page 2 of their letter reads “the federal stimulus package has provided that any person who loses their employment or has their work hours reduced can qualify for unemployment for the full amount of their original pay. Hence, for now, almost all individuals who lost their jobs will have their income supplemented by the federal government and they should be able to pay their taxes.” That is simply a cold hearted statement divorced from reality. In other words, those who are unemployed and fortunate enough not to be caught up in the bureaucracy of the state and federal government relief programs, please take your unemployment payment and immediately pay your property taxes. Forget about food and shelter for your family, your priority is to make your local Tax Collector happy. I am disappointed that the city would take the guidance of a group whose priorities are so misguided. (ATTACHMENT “C”)
- Interestingly, Mrs. McCrosson did not mention at all the guidance issued by the League of Municipalities on April 15, 2020, which is attached. The League has been in existence for over 100 years and advocates on behalf of the whole municipality and has always provided superior legal services. The League focuses on the well-being of the entire community and is not laser focused on one or two staff positions within local government. Their advice acknowledges the challenges being faced with the pandemic and that different towns may react differently depending on their unique situation. In fact, the League provides a sample resolution that many towns are utilizing to adjust their interest rates in response to the virus. I highly doubt that the League would issue a flawed resolution to every municipality in the state without exhausted research and consultation with the state. (ATTACHMENT “D”)
- At this point in time, third party investors would be one of my least concerns. Ocean City will always be a quality investment opportunity.
- Mrs. McCrosson stated publicly at the council meeting that you were involved in the process of researching and formulating this resolution that provides a lower interest rate only to delinquencies in excess of $1,500 for not one, but two tax cycles. Given your direct and significant conflict of your two (2) business properties being in serious property tax delinquency, you should not have been involved in this process at all.
Regarding Mr. Barr’s reference to the machinations of Trenton and Assembly Bill A3902 and lack of companion Senate bill, we elect our local leaders to assume responsibility especially during times of crisis. If Mr. Barr expects quick and decisive action from Trenton or Washington DC in response to the pandemic, then he and others will be disappointed.
We as a community are responsible for our own destiny and should use all available tools to advance our cause and help our people.
Like you, I believe in the people of this city, state and county to do the right thing. Sure, there will be a small percentage of individuals who will attempt to capitalize on the situation for personal gain, but the vast majority of the public will do what is right when called upon.
For the most part, the residents of Ocean City have been cooperating with local and state direction during this uneasy time. In response, the city should offer some degree of financial relief and peace of mind to those who are momentarily in an unfortunate situation. Often, when you speak about the Housing Authority residents, you talk about care, compassion and understanding of fellow man.
Why you could not find a way to extend those considerations to others in the community in need is puzzling and frankly, very sad.
David Breeden, President Ocean City Fairness in Taxes
OCNJ FIT - April 2020 Response to Delinquent Taxes