Cal Cities joins coalition of counties, special districts, and schools to protect property tax collection; provide relief to most in need

Upholding the payment deadline is critical for the continuity of local government services.
 
In addition to Cal Cities, the coalition includes the California State Association of Counties, the Rural Counties Representatives of California, the Urban Counties of California, the California School Boards Association, the California Association of School Business Officials, the Association of California School Administrators, the California Special Districts Association, and the California Association of County Treasures and Tax Collectors. The coalition formed in response to California business interests’ repeat request to the Governor and state Legislature to delay the April 10, 2021 property tax payment deadline. The coalition of local agencies are requesting that the Governor and the Legislature hold firm on the deadline, and continue the additional relief protections established through Executive Order (EO) N-61-20 and adopted throughout the state.

EO N-61-20 provides counties with the authority needed to forgive any penalties and interest associated with a taxpayer’s hardship to pay timely, which includes small businesses who need extra time to pay without being penalized. The EO is being implemented smoothly and is working as intended.
 
A blanket delay of the collection would harm cities’ ability to provide core services at the expense of those in high-need and high-risk categories in our communities. Cities rely on the cash flow from property tax collection each April to meet their expenditure needs up until the December installment. Summer months are times where local agencies require liquidity for capital projects and bond payments. Disruptions to that liquidity have immediate and dire consequences. Further, bonded indebtedness secured by real property relies on the payment dates identified in statute. If those funds are not collected timely, a technical default could occur, jeopardizing future bond structures and potentially triggering demand notices on the debt holders.

California’s local agencies are working diligently to maintain essential services and infrastructure during this ongoing and unprecedented public health emergency. Holding the deadline, while providing authority for targeted and individual relief, has proven effective in getting help to those who need it while keeping cities solvent and in a position to continue to provide critical services.

To date, California cities have spent hundreds of millions of dollars supporting small businesses through direct grants and utility relief. At a time of great uncertainty, Cal Cities supports additional state and federal relief to Californians residents and businesses who have demonstrated need. The viability and continuity of cities, counties, schools, and special districts is key to an upward bound recovery.

A copy of the Coalition letter can be found here.