Trumbull council approves tax deferment plan
TRUMBULL — Some taxpayers struggling to make ends meet during the COVID-19 outbreak got a little breathing room Tuesday, as the Town Council voted unanimously to approve a 3-month deferment on property taxes due April 1 and July 1.
The deferment does not apply to banks, so homeowners whose taxes are paid through an escrow account in their mortgage are not affected.
Town Attorney Daniel Schopick explained that Gov. Ned Lamont had issued an executive order mandating municipalities pass some sort of property tax relief. The options were two: allowing the deferrals or reducing the interest rate on late payments from 18 percent to 3 percent for three months.
According to Schopick, the executive orders were intended to apply to those affected by the outbreak, but towns could also drop the application requirement and apply the plan across-the-board.
“The feeling was that it was an administrative hassle to prove people are affected — that they lost their jobs or had their income decrease 30 percent,” he said.
Placing such a burden on town tax officials made little sense since the tax relief was a deferment, not a forgiveness plan, so the town would still be getting paid, albeit a little later than usual, he said.
“This is a cash flow issue, not a ‘We’re never going to get the money’ issue,” he said.
The only exception to the blanket deferment are landlords, who must apply for it and prove that they are giving rent relief to their tenants to qualify,” Schopick said.
Finance Director Maria Pires said that of the two plans on the table, deferments made more sense than reduced interest rates.
Responding to a question from Minority Leader Carl Massaro, R-3rd District, Pires said the town was in solid financial shape to handle the potential late payments.
“I don’t see any problem,” she said. “We’re good to the end of June.”
Pires said the tax payments made through escrow accounts, which total about $15 million per quarter, had either been received or were expected by the end of the month.
“All the collections have been coming in,” she said.
Massaro pointed out that the town also was likely to experience a shortfall in other revenues, including permits, fees and enterprise funds such as the Tashua Knolls Golf Course.
“There are revenue streams that can’t be made up,” he said.
As the financial impact of the virus increases, Massaro said he thought the effect on the town’s budget would be greater than Pires and First Selectman Vicki Tesoro projected. Although the Health Department’s latest report showed about 245 Trumbull residents diagnosed with COVID-19 and 29 deaths associated with the virus, the financial impact of closed businesses and unemployed or underemployed residents could only be estimated, he said.
“I think we’ll see a big deferral in July,” he said.
Tesoro agreed that there were residents in tough financial conditions, but she did not think many taxpayers would take advantage of the deferrals if they were not in financial need.
“We get calls daily that people are struggling. People are scared,” she said. “Lots of people in town are probably hurting.”
But for those not experiencing financial hardship, they would likely pay their taxes on time, she said.
“I would recommend that anyone who can pay their tax pay it as they normally do and not wait,” she said. “No one needs to accrue additional liabilities. And remember, when the extension ends, there is still the July bills and the state and federal taxes are due July 15. If you can pay, you should pay.”