Property Tax Grace Period Extension In Howell? State Says No

HOWELL, NJ — Howell Township officials were scheduled to take up a resolution to extend the township's grace period for property tax payments next week.

That plan has to be scrapped now that the state Division of Local Goverment Services issued guidance to municipal tax collectors that extending the grace period is a violation of state statute.

Howell officials had held off on extending the grace period, Township Manager Brian Geoghegan said, because they were waiting to see if the state was going to first change the deadline.

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Second-quarter property taxes are due May 1, a deadline set by state statute. The statute allows towns to provide a grace period of up to 10 days, and after the 10 days, towns can charge interest on late payments.

Some towns, including neighboring Brick Township, had passed resolution to extend the grace period and charge zero interest. The move by neigboring towns had prompted discussions among Howell residents about the issue.

On Monday, however, Brick Township officials said the state notified tax collectors in an email at 10:49 p.m. Friday that an extended grace period on the interest violated the statute.

"The towns are saying we're good with not collecting this money," Brick Township Mayor John G. Ducey said. "(The state) won't let us say no to getting more money from our residents."

A spokesperson for the state Department of Community Affairs in an email Monday afternoon did not immediately provide additional information, saying only, "We'll get back to you as soon as we can."

On Monday, Gov. Phil Murphy laid out preliminary plans for restarting the state's economy and removing the stay-at-home order and getting people back to work. More than 858,000 unemployment claims have been filed in New Jersey since March 15, when some of the earliest restrictions for social distancing were put in place. Read more: NJ Coronavirus Updates: Here's What You Need To Know

Thousands of residents are still waiting to get through to personnel at the state Labor Department to get their claims out of of limbo and receive payments so they can pay bills and feed their families.

Towns had been asking for guidance about the grace period for weeks, because there have been previous instances where extensions had been approved.

In 2017, the state Legislature approved a grace period extension for federal employees who had been furloughed during the federal budget battles. Gov. Phil Murphy signed that legislation. And in the wake of Superstorm Sandy, then-Gov. Chris Christie issued an executive order extending the grace period on property tax payments because of the devastation of the storm.

There was a bill in the state Assembly to extend the second-quarter property tax payments that passed 79-0, but the state Senate has not acted on it, because it would have allowed towns to delay property tax payments to school districts, affecting the districts' ability to pay staff. That bill included a provision to allow the state to allow towns to extend grace periods for property taxes and other municipal charges, Ducey said.

Towns are permitted to charge up to 8 percent interest per year for amounts up to $1,500, and up to 18 percent interest per year for amounts in excess of $1,500, under the state statute.

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