State Won't Allow Brick's Property Tax Grace Period Extension

BRICK, NJ — The state has rejected an attempt by Brick Township to ease some of the financial stress residents are feeling during the coronavirus crisis by extending the grace period for second-quarter property tax payments.

Brick Township Tax Collector Jo Anne Lambusta was notified in an email sent to all the local tax collectors at 10:49 p.m. Friday that plans to extend the interest-free grace period on those payments, due May 1, is a violation of state statute.

"All we were doing was giving people – many of whom are not earning a paycheck right now – more time to pay their quarterly taxes without worrying about penalties," Brick Township Mayor John G. Ducey said.

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Interest collected on property tax payments that are late is set by the statute, which limits grace periods to 10 days. The interest collected goes to the towns. The township council on April 14 approved a resolution to forgo the interest until May 31, one of a number of towns to do so.

"The towns are saying we're good with not collecting this money," 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.

"Extending the grace period has been done in the past by the state in the wake of Sandy and even for federal employees during the recent furlough," Ducey said.

The township had been asking the state for guidance about the grace period for weeks, Ducey and Brick Township Business Administrator Joanne Bergin said, because of the past 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, Ducey said. 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.

"But the state sent no guidance, nor provided any direction, despite a constant stream of calls and requests for clarification," Bergin said. "The state sat silent and let towns proceed based on our best judgment, common sense and past practice."

"I cannot understand why the state won’t approve this small gesture during this unprecedented time," Ducey said.

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.

Brick Township's resolution reduced the interest to zero percent until May 31.

"We wanted to ... set the interest on late fees at 0 percent for the month of May," Bergin said. "We tried to get feedback prior to doing a resolution and got none. The council passed the resolution at the April 14 council meeting. Other towns acted accordingly based on their unique needs and circumstances."

Ducey said Murphy could make the decision immediately to allow the grace period extension if he chooses to go with an executive order.

"We went on past practices because anytime something this big has happened we were allowed to do this," Ducey said. "I cannot overstate how disappointed and frustrated I am with the state's decision."

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This article originally appeared on the Brick Patch