RARITAN TWP, NJ - Mayor Jeff Kuhl and the entire township committee are in lock step in the decision not to extend the grace period for property taxes in Raritan until June 1.
On April 28, Gov. Phil Murphy issued an executive order allowing municipalities to defer property tax payments from May 1 to June 1. The move in Trenton was needed since the tax due date is set by state law and could not be changed at the local level.
The last-minute move by the governor and state assembly, according to Kuhl, was done to cover a handful of municipalities across the state that extended the payment period without benefit of a state sanction.
The issue for municipal governments is not the 20-plus day delay in receiving its share of the tax revenues. It is the lack of legislation that would allow towns to withhold county and school payments for the same period of time.
“The intent was goodhearted, but the planning and execution were nil,” said Committeeman Gary Hazard, referring to the governor’s action.
In Raritan, the municipal portion of every property tax dollar paid is approximately 11.9 percent. The county gets 12 percent, and the balance of over 70 percent goes to schools.
So whether Raritan residents pay their tax bills on May 1 or June 1, the township is still obligated to pay out more than $12 million on its statutory due date.
At the start of the committee meeting May 4, committeewoman Karen Gilbert amended the agenda to include this pending tax issue.
When the discussion began the mayor said, “We don’t have the money, we’d have to borrow millions of dollars.”
He added that the loan would be at high interest rates, which in the end would only add to the overall burden to tax payers. The committee as a whole agreed that wouldn’t be a fair or responsible solution.
It was estimated that a homeowner of an average valued home in Raritan would face about $25 in late fees and penalties.
Kuhl said he participated in a conference call with a group of mayors from across the state and most, he said, “were pretty upset.”
The mayor also voiced concern about how the announcement of Murphy’s decision to allow for the payment date to be moved forward a month was portrayed.
“The headlines weren’t accurate,” he said. “I hope people don’t go by that. You had to read down to understand the true situation.”
Once it was established that the township’s outgoing payments would not move to June along with property taxes, the committee unanimously agreed Raritan property taxes would still be due on May 1, with the regularly allowed 10-day grace period to May 11.
While the township doesn’t have an extra $12 million in its coffers, it is on firm financial footing, according to committeeman Louis Reiner, who thanked CFO Bill Pandos and administrator Don Hutchins for what he called this years’ phenomenal budget. He said that the tax rate is flat for the fifth year in a row, debt has been reduced by $5 million since 2016 and the open space debt has been satisfied.
Reiner said that thanks to Pandos and Hutchins, “The township is in great fiscal shape and we have a sizeable surplus.”