DEPT	DESCRIPTION	ACCT	2009 ESTIMATED REVENUE
City Treasurer	Interest-City Tax Certificates	903101	$ 2,115,500.00
City Treasurer	Interest-Delinquent Personal Property Taxes	903201	32,400.00
			$ 2,147,900.00

 

Based on the 2009 budget (see above), the City stands to lose $1,073,950 in revenue. However, the cost to the City would be more than just the lost revenue.

 

Expensive reprogramming would need to be done to implement the new interest rate, as such an intrinsic change touches nearly every aspect of the tax collection system. This reprogramming would then need to be reversed at the sunset date, effectively doubling the system costs of the interest rate change.

 

Since the revenue generated by delinquent tax collection would be reduced, it would no longer be sufficient to cover the costs of collection, as well as the debt service on the monies borrowed by the delinquent tax fund to purchase the delinquent tax receivables, which makes the general fund whole, assuring no reduction in tax levy funded services.

 

The change in the interest assessed on delinquent property taxes would definitely have a tax levy impact. The change in interest rates would essentially transfer the burden of delinquent property taxes from the non-payers to those that do pay their taxes. Whereas now, the interest and penalty realized on delinquent tax collections has been sufficient to offset the cost of the delinquent tax fund debt service, as well as the costs of the collection agent’s services.

 

While the legislators may be well intentioned, this bill would actually adversely affect the over 90% of City property taxpayers who do not go tax delinquent. This office believes this bill is not in the best interest of the City and urges you to oppose it.

 

 

 

How much $ would we lose under this proposal?

 

 

Adam Plotkin

Clerk, Committee on Labor, Elections, and Urban Affairs

Office of Senator Spencer Coggs

phone, 608-266-2500

fax, 608-282-3546

_____________________________________________
From: Rep.Gottlieb
Sent: Wednesday, February 25, 2009 11:19 AM
To: *Legislative Assembly Republicans; *Legislative Assembly - Independents; *Legislative Assembly Democrats; *Legislative Senate Republicans; *Legislative Senate Democrats
Subject: Co-sponsorship of LRB 1909/1 the Property Taxpayers Temporary Assistance Act; Deadline:March 4, 2009

To:     All Legislators

From:   Rep. Mark Gottlieb

Date:   February 25, 2009

Re:     Co-sponsorship of LRB 1909/2, the Property Taxpayers Temporary Assistance Act

Co-sponsorship deadline is March 4, 2009.

Due largely to current economic conditions, many municipalities and counties are reporting significant increases in delinquent property taxes.

Under current law, late property taxes are charged 12 percent annual interest and a penalty of up to 6 percent, depending on the county.  In the current interest rate environment, we should not be charging people 18 percent if they are unable to pay their taxes on time.

LRB 1909/2 reduces the interest rate on late payments from 12 to six percent per year, until the end of 2010.  It does not make any change to late payment penalties.

If you would like to co-sponsor LRB 1909/2, please contact my office by email or by phone at 7-2369 by March 4, 2009.

 

Analysis by the Legislative Reference Bureau

Under current law, the interest rate on delinquent property taxes is 1 percent per month for each month that the taxes remain unpaid. Under this bill, beginning on the bill’s effective date and ending on December 31, 2010, the interest rate on delinquent property taxes is 0.5 percent per month for each month that the taxes remain unpaid.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

<<09-19092.pdf>>