Taxes may be put off; they’ll still have to be paid
Taxes will still have to be paid, but people will likely be given more time, at a reduced interest rate, First Selectman Rudy Marconi said. And budgets for next year will be reworked to better accommodate a coronavirus crisis that has business at a standstill and many people out of work, he added.
Still, the town will likely have revenue shortfalls and periods when it needs to borrow to keep operating, Marconi said.
“There is concern from our tax collector, our director of finance, as well as our treasurer, that based on 2019 cash flow demands, that we potentially could run into a cash shortage, depending on how many people take advantage of whatever program — whatever tax relief program is offered,” Marconi said.
Town officials had been working on their own tax relief approach, but it now appears they will have to work within the guidelines of two programs the state has outlined for municipalities, Marconi said.
The first selectman, recovering from his bout with COVID-19, discussed the town’s tax and budget situation Tuesday, April 21, looking ahead to a Board of Selectmen’s meeting Wednesday night, April 22, and a tri-board meeting with the boards of selectmen, education and finance all gathered — virtually, or course, not in person — on Thursday night, April 23.
The meetings were expected to be available for people to watch on Zoom by preregistering through the town’s website: www.ridgefieldct.org.
“Originally, I met with several of the major landlords in Ridgefield to discuss a tax deferment program that, as long as the landlords could attest to the fact that the tenant was being given the same consideration, we would defer taxes for 90 days,” Marconi said
“And the state, when I sent it to the state, put a hold on it because they felt there were statutory issues that needed to be addressed.”
The state instead steered the town toward two programs outlined in the multiple executive orders issued by Gov. Ned Lamont during the coronavirus crisis.
“These programs are available for everyone, it includes the general taxpayer,” Marconi said.
One is a deferment program and the other an interest rate adjustment, Marconi said, but both state initiatives would allow taxpayers to put off paying taxes without incurring the onerous interest rate that usually applies to late taxes — and appears designed to assure that people pay on time.
“Currently, if you run late on your payments, you’re charged 18 percent interest — the executive order from the governor would reduce that interest rate to 3 percent,” Marconi said.
“I’m just giving you a very simple explanation,” he added.
“The municipalities are required to choose one program or the other, or to offer both. But we have to do something,” he said.
“A cross section of the state that was compiled by CCM (Connecticut Conference of Municipalities) shows that a greater percentage are offering the deferment, but a large percentage are offering the low interest rate — not many have offered both,” Marconi said.
He expected the tax relief options would be thoroughly aired at the April 22 Board of Selectmen’s meeting.
“The major topic will be the decision as to what we do,” he said.
The town needs to notify the state by April 25 as to what tax relief actions it is taking, Marconi said.
Meanwhile town officials are looking into mechanisms for the borrowing that will likely be needed to carry the town through a period when many taxpayers may be deferring payments, and other revenues will likely fall short of original projections.
“Bond counsel for the town, Robinson and Cole, has communicated the availability of what is called a TAN, which is a tax anticipation note, that are relatively inexpensive from an interest perspective, that the town could sell to generate the necessary cash during the points of cash flow issues,” Marconi said.
“It’s important to remember that this is a deferment, not an abatement, not a forgiveness, strictly a deferment, that will allow people more time to get back to work,” Marconi said, “and that’s the reason for the TAN, is to fill that void of cash flow so that we can continue to operate while giving the needed tax relief to the people.”
The town will not go through all the usual steps and gatherings — public hearings, the Annual Town Meeting, the referendum vote — but Marconi said town officials will still try to make the process open and transparent.
“Under the governor’s executive order, as you know, public meetings with person to person dialogue and votes are suspended. And the authority to establish the budget, that authority has been given to the Board of Selectmen in towns where there is a Town Meeting that acts as a legislative body,” he said.
That’s a group that includes Ridgefield. However, Marconi anticipates that the process used in town will include a close collaboration between the selectmen and the Board of Finance, which has authority under town charter for recommending a final budget and tax rate to voters.
Officials will keep the decision-making process open to public scrutiny — probably through having meetings open to viewing on Zoom, with preregistration through the town website.
“We are trying to create as much transparency as we possibly can, given the tools we have during these unprecedented times,” Marconi said.
“I can say that the Board of Selectmen’s goal is to deliver a zero percent increase to the taxpayers of Ridgefield for the fiscal year ’21,” Marconi said. “And as you can imagine, that’s going to put quite a stress on both budgets. But these are unusual times we’re in — unprecedented — and I think it’s going to call for unprecedented action, to begin to recognise the economic negative consequences of the coronavirus.
“There is no question that we will see a decline in our revenues for fiscal year ’21. Whether it’s the golf course, the rec center, general taxes — we need to be prepared,” Marconi said.
“There are going to be some very difficult decisions that have to be made — but they do have to be made.”