Message from Mayor Madden RE: Optional Tax Grace Period
As many of you are aware, on April 28, 2020, Governor Murphy enacted Executive Order 130 which allows municipalities the option to extend the grace period on 2020 2nd Quarter taxes until June 1st.
Currently, the grace period for 2nd Quarter 2020 taxes is May 11th by 4:00 p.m. The optional extended grace period in Executive Order 130 would only be for an additional 21 days at which point your full tax payment would be due. Failure to pay on June 1st would revert the interest back to May 1st.
The statutory interest for these extra days that the Governor’s order would forgive would equate to 8% on the first $1,500.00 and 18% on the remainder per annum, which equates to only $.33 cents per day on $1,500.00. If your 2nd Quarter tax bill is $1,977.00, the interest to June 1st would be $17.17. We realize the Governor’s Executive Order made it sound like there was going to be major relief to you as a taxpayer, but the truth is in the numbers.
As much as the governing body would like to offer this as a kind gesture to our taxpayers, due to cash flow issues, the Borough of Middlesex is not able to extend the grace period.
This coming month we have the following statutory payments due, which the Governor did NOT extend:
County payment of their portion of the 2020 2nd Quarter property taxes: $1,500,000.00
School District Budget payment: $2,200,000.00
We currently have about $1 million in our Operating Account and $350,000.00 in surplus. With $3.7 million dollars in statutory payments that must be made by the middle of May, and with only $1.350 million dollars in our accounts to cover our expenses, the Borough must collect property taxes to close our Budget shortfall of over $2 million dollars.
The Borough has significant, mandatory payments due by mid-May so we simply cannot afford to offer this 21-day grace period to our citizens. On behalf of the Governing Body and the Administration we are very sorry. This is a stressful time for everyone; government is here to serve you; but we need to be able to pay our bills to continue to provide the services on which you depend. We are proud of our town and how everyone is coming together to weather this terrible time and we appreciate your understanding on this matter.