As an executive councilor and candidate for governor, I am hearing a lot from constituents who are worried about their health and economic survival.
COVID-19 is not the flu and the financial impact will not be minor. Many are raising concerns about their property taxes coming due while they are losing their jobs.
Our tax problems are made worse because New Hampshire is more heavily reliant on property taxes than any other state in America, and the problem is more immediate than most people realize. While most residents pay property taxes in June and December, a small number of communities are on a quarterly schedule that has payment due in less than 10 days.
The governor should first consult key legislators, but then quickly take action to suspend interest, penalties and liens imposed upon the late payment of property taxes.
Concord, Claremont, New London and Hinsdale collect local property taxes on a quarterly basis on March 31. Late payments are immediately subject to an 8% interest rate until the town or city takes a lien against the property. Interest rates then jump to 14% until the property is either redeemed or sold.
The governor must immediately put in place a 90-day moratorium on penalties, interest and liens for late payment of residential property taxes so that state leaders can have time to assess the extent of the economic crisis and homeowners can live without fear of incurring exorbitant late fees or other penalties. This 90-day moratorium is no different than the decision to delay federal taxes from April 15 to July 15 or the decision to suspend mortgage foreclosures.
The property tax interest and penalty moratorium should be applied to all year-round, principal residences. Some might argue the moratorium should be more targeted, but there is no time. Homeowners of good conscience will, if they can, pay their taxes on time. Means testing a moratorium on such short notice will not likely work. Mortgage companies and banks should also be made subject to the order to the extent they collect property-tax payments as a condition of the mortgage.
Once there is word on federal assistance for municipalities, the state can take up the question of delaying all property-tax payments. The taxes will eventually be paid, but the municipalities will have cash flow problems without state or federal assistance.
Starting the interest and penalty moratorium with the March payment will allow the state to get a better handle on costs before the more common twice-a-year payments come due in June. There is little chance that the pandemic will be resolved before June, and the state should plan to continue the interest and penalty moratorium for both the March and June tax payments. By June, we can decide if the moratorium should apply to business properties.
Providing property tax relief in a time of crisis should not be a political issue. The fact that property taxes are coming due as thousands of Granite Staters lose their jobs raises questions about the property tax that we have avoided for far too long, but we must wait a little longer to address these concerns.
We first must bring COVID-19 under control and deal with the immediate consequences of so many of our neighbors being put out of work. Placing a moratorium on property-tax interest and penalties will be a good start.
(Andru Volinsky of Concord is an executive councilor for District 2 and a Democratic candidate for governor.)