In a world where many normal bureaucratic functions have been put on hold during the COVID-19 pandemic, property taxes in Connecticut are still being paid on time.
Tax collectors across the state contacted by CT Examiner say that they have been pleasantly surprised by the amount of money they have collected so far in 2020.
“I thought it would be a lot less,” said Deborah Fioretti, tax collector for the town of Avon. “It was better than I expected,” agreed Ridgefield Tax Collector Jane Berendsen-Hill.
On April 1, Gov. Ned Lamont issued an executive order requiring that towns offer the option either of a low-interest program or a property tax deferral.
The deferment option would grant an extension of 90 days to individuals, businesses and nonprofits to pay taxes on personal property, real estate, motor vehicles or municipal water, sewer and electric rates.
The low-interest rate option sets the interest rate on late property taxes and municipal water, sewer and electric rates at three percent for 90 days.
The Towns of Old Lyme, Old Saybrook, Clinton, Montville and Killingworth — all of which chose the low-interest program — are reporting property tax collection rates equal to or higher than last year at this time.
Stonington — which opted to offer deferral by application — reports an increase of a million dollars in collected property taxes compared to last year. Tax collector Linda Camillo said that the town consistently received more than $100,000 in online payments every day in July, and that the town’s top 20 taxpayers had already paid in full their July assessments.
Camillo and a few other tax collectors also reported that more people were paying their taxes in full for the year rather than waiting until the next installment is due. They suggested that this could be in response to the uncertainty surrounding what will happen with the virus in the fall.
Although the percentage of property taxes collected in many towns did decrease when compared to last year, town tax collectors say that this decline was not nearly as precipitous as they had imagined.
In the towns of Chester, East Haddam and Guilford, which collect property taxes semi-annually — meaning only half of taxes are collected in July — town officials were similarly upbeat.
Collection decreased from 50% to 42.5% of property taxes this year in Chester, but town tax collector Madaline Meyer said the rate was “excellent” given that the town had offered taxpayers the option to defer payment.
In East Haddam, where the collection decreased from 48.17% to 39.39 %, tax collector Denise Dill said that she thought the numbers were “on track.”
In Guilford, where the tax collection decreased from 40.3% to 35.1%, Tax Collector Debi Milano said she was “pleased, but not surprised” that most people had decided to pay taxes in July, as usual.
In towns that chose instead to defer by application, tax collectors contacted by CT Examiner reported that fewer people than expected actually applied for the extension.
Deborah Fioretti, tax collector for the town of Avon, said that out of about 300 commercial businesses, only 30 applied to defer. Waterbury tax collector Frank Caruso said that they sent out 54,000 postcards regarding the deferral, but less than 350 people applied.
But for those towns that did opt for the deferral option, it does appear that collection rates differ depending on average household income.
In the towns of Westport, Wilton, Ridgefield and Avon, all of which, according to US Census data from 2017, fall in the top 15 towns in Connecticut with the highest household income, property tax collection remained about equal or only slightly less than last year.
New Haven — which implemented both the deferral and low interest program — reported a slight decline of about 2.3% in the percentage of property taxes collected.
By contrast, New London, East Hartford and Mansfield — which all fell into the bottom 20 in terms of household income — showed greater declines compared to last year.
New London Mayor Mike Passero said that he is not concerned.
“We were actually pleasantly surprised with the tax collection rate,” he said in a Thursday phone call with CT Examiner. “We’re actually only 3.1 million dollars short.”
According to Passero, because 60 percent of revenues come from escrow, the shortage in property taxes will not have a significant impact, but that city officials might not know the full impact of COVID on tax collection until mid-way through next year.
Passero said that New London was already taking precautionary measures by preventing its departments from any non-essential spending until the city is assured of having the necessary revenue.
“We were in a healthy financial position going into this,” he said, “and we budgeted conservatively.”
Tax collector Iris Laurenza of East Hartford said that, while a fair comparison couldn’t be made before the new deadline of October 1st, she believed that the amount of money they collected in July was good under the circumstances.
Not all towns with lower household incomes saw a decrease in collection rates.
Ansonia, Hartford and Waterbury, also falling into the bottom 20 towns for household income, collected a nearly equal, or higher, percentage of property taxes than they had last year.
In Waterbury, Caruso said, however, that he remained concerned about the next installment of taxes. In an email to CT Examiner, Caruso wrote that by the time the pandemic hit, banks already had most of the funds in escrow, and paid the money out on time, but that he’s not sure what will happen six months from now.
“If people are behind on their mortgages, will the banks still disburse?” He said, “I don’t think we have seen the full effect of everything yet.”
This story has been edited to correct the name of East Haddam Tax Collector Denis Dill.