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Tuesday, January 14, 2014

Council stonewalls tax lien item

How to balance all these competing interests?

City Council stonewalled the new Mapp administration on a routine tax lien resolution at Monday's agenda-setting session for next week's business meeting.

The resolution proposed to renew the City's standard penalties and setting interest rates on delinquent taxes and for tax lien sales. It failed to move forward to next week's agenda, when Chairman Bill Reid polled the Council and Council President Bridget Rivers and Councilors Greaves, Taylor and Reid were opposed to moving the resolution forward.

Property tax collections fell disastrously under Mayor Robinson-Briggs to a low of about 93%, which Tax Collector David Marshall says he has gotten up to 96.42% since he was brought on board in 2013.

Property tax collection rates are a constant source of anxiety for elected officials. Not only must they take into account angry constituents, they have a fiscal responsibility towards maintaining the city's good credit.

Lower tax collection rates affect both the city's credit rating and the amount of cash required by the state to be held in reserve for uncollected taxes.

All of which helps explain the carrot-and-stick approach (well, mostly 'stick') by the state's municipalities in the constant effort to push collection rates toward 100%. Hence the public notices which shame delinquents and the tax lien sales which bring in needed revenue to the city from those who speculate in others' misery.

Despite the lack of a detailed analysis of who exactly are the property tax laggards -- is it Senior Citizens? out-of-work homeowners? absentee landlords? -- Councilors Bill Reid, Tracey Brown and Gloria Taylor proceeded to discuss the matter as if it were only about Seniors.

But when asked for a proposal on how to handle the situation, the only response was Reid's suggestion to lower the interest rates.

Understanding that tax lien investors are looking at getting the highest return on their money, the suggestion by Reid that lower interest rates would not deter these investors seems counter-intuitive.

Councilor Williams took another tack, asking if the proposed interest rates were the same as those adopted by the Council (without objection) under the Robinson-Briggs administration. The answer was 'yes', to which Williams then asked, 'So, what has changed'? There was no answer to her rhetorical question.

What Councilor Reid (and, by extension, Brown and Taylor) don't acknowledge is that giving Seniors a further tax break (they already get a break by state law), means that all the other taxpayers must face a rise in their taxes to cover the shortfall created by giving Seniors special treatment. There are no free lunches.

Are Reid and Company just showboating? One may wonder if they fail to come up with concrete proposals.

Will all be made clear next Tuesday (Monday is the observance of MLK Day)?

Since the efforts of Mayor Mapp, City Administrator Smiley and Corporation Counsel Minchello to resolve the matter last evening with a recess was rebuffed, the resolution will be brought forward next week as a 'new' item and will have to be added to the agenda with five affirmative votes.

This last fact was underscored by Council President Bridget Rivers twice in the course of the deliberations.

It would be entirely possible for the Rivers-Reid-Brown-Greaves-Taylor bloc to refuse to take up the matter.

Then what would the Mapp administration do?

-- Dan Damon [follow]

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Olive Lynch said...

If the city cannot collect taxes from its "customers", and generate income -- it will have to do what every other business and individual has done in these hard times -- cut back spending.

Which means layoffs.

It's a chicken and egg problem.

People just can't out afford rising taxes, rising energy, rising food, now rising health care insurance costs -- with flat or lowering income.

Governments are facing the same problem at every level.

Costs are going up and up, while income is flat or declining.

Anonymous said...

Reid and Greaves don't pay their taxes in a timely fashion. They both owe at least 1K according to tax records so of course they object.

Plainfield is run by some really dumb people when it comes to running this city. It's no wonder.

Bob said...

The not so fabulous five will have to face the voters. I guess they did not get the point at the reorganization meeting that the voters are watching them. They seem so arrogant and self centered. Maybe we need term limits for councilors of three terms and then they have to take one term off before running again. I will work to get these people out of office when their time comes. We need a good Council President and Chair anyway, so change is in the air.

Dottie Gutenkauf said...

For member of the council to reject this year the same rates that they approved last year is ridiculous! It makes me wonder...

Anonymous said...

I know a senior who goes delinquent on taxes in winter months because of heating bills, and catches up in the summer. I guess council thinking is that with low bank rates, the rate charged delinquents should be lowered. In reality, it is not the interest, but the principal that is hard to pay.

To save money for taxes, this senior converted to natural gas heat. Converting will save thousands in heating bills (as long as she stick with PSE&G- the unregulated gas providers are rip-offs), but where do the poor get the $6,000 conversion cost? A city loan- not grant- program, perhaps as a special assessment on the participating individual properties, may be something to consider. Savings would repay loan and save seniors money to pay tax principal.