HASBROUCK HEIGHTS, NJ - The potential of Hasbrouck Heights extending the grace period for property taxes was brought up by a concerned resident at Tuesday’s evening virtual council meeting.
The resident noted that she is currently unemployed and also not receiving rent payments from the rental properties that she owns, and initially asked why Hasbrouck Heights had not extended the due date for taxes.
Michael Kronyak, Borough Administrator, explained that only the state could extend the date, and that according to statute, taxes are due on certain quarterly dates (February, May, August, November), and the state had not done that, the resident replied that she had misstated her question, and had meant to ask about the “grace period.”
Kronyak noted that some towns had extended the “grace period”, but noted that if the payment was not made by the expiration of the grace period, the interest on the taxes reverted back to the original due date. Mayor Jack DeLorenzo added that the town is considering extending the grace period, but discussion would need to be completed with the Finance Committee.
Kronyak also noted that in speaking to a town that did extend the grace period, it took out a loan (a tax anticipation note) to cover the amount they projected to be the shortfall.
“If you were to extend the “grace period” to one months or two months,” Kronyak stated “you (Hasbrouck Heights) would have to borrow 1/12 or 2/12ths of your tax levy to give you the cashflow so that you could meet the obligations that come through, so it is not as simple as decision as it might appear.
“It might appear to give everybody extra time, but we still have all the obligations that we still need to pay as they come due.”
Kronyak stated that it might be something that the Borough and the Finance Committee look at for the third tax quarter instead of the second. He noted that the Borough has already received tax payments from mortgage companies, commercial property owners, and some of the larger tax payers, almost like they are processing them early to make sure that they get in.
“We ran into that issue with the Board of Education,“ said Mayor Jack DeLorenzo.
“Every month we have an obligation to the Board of Education,“ Kronyak stated. “There was some talk that you could prorate the Board of Education payments based on the percentage of taxes you collected, and I have not seen the final decision on that. But it would be the domino effect from a cashflow problem to the Board of Education.”
Kronyak noted that the Board of Education’s cashflow gets better during the summer months, and that the town decided to make two payments, each 50% of the amount due, to Board of Education this month to help manage the cashflow.”
Kronyak, later in his finance presentation, noted four areas of revenues that the Borough is anticipating a reduction in.
Hotel Taxes - Kronyak noted that with occupancy rates down, the borough will be seeing less revenues from this tax. Additionally, he noted it is on a two-month lag, as the payments go to Trenton and then distributed to the Borough. "In May, we will see the impact, as that is when the March taxes collected will be received."
Income from Investments - With the economic downtown, we can expect less return on the Borough’s Investments.
Construction Permits - With the COVID 19 shutdown, revenues from construction has stopped.
Municipal Court - With the courts closed, no revenues were collected.
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