(The Center Square) – Maricopa County Treasurer Royce Flora is requesting the same grace period most everyone is seeking during the COVID-19 pandemic be extended to Arizona homeowners who have to make their May property tax payment. He is asking the legislature to consider delaying the deadline by three months, to Aug. 1.
According to The Arizona Republic, the actual savings of a delayed payment, about 1.3 percent interest per month, for the average homeowner would be about $13 per month.
Flora's staff discovered a provision that allows the county treasurer's office to allow leniency on some small businesses' personal property taxes, including waiving interest and extending the payment deadline. Flora uses this argument to make the case that the same should be considered for homeowners.
Sean McCarthy, senior research analyst for Arizona Tax Research Institute, told The Center Square that a delay in property tax payments may buy some time for homeowners who are feeling the burden of coronavirus and are having to decide which payments to make. A delay in payment would not necessarily be tax relief as the expected amount would still be due, just at a later date.
"There are a lot of local governments that are very dependent upon property tax payments, and if you were to jeopardize those somehow, the smaller jurisdictions that are heavily dependent on the property tax would be threatened by those," McCarthy said. "If delayed payment threatens that revenue stream then that can be particularly difficult because they don't have other sources of revenue."
Another question to be raised is who exactly would benefit from the delay. McCarthy said that most homeowners' property taxes are paid through their mortgage. Those who may be paying property taxes directly in twice a year installments are more likely to be seniors and retirees who may or may not be affected by unemployment. The number of those affected varies across the state. In Maricopa County, less than half of its citizens pay property taxes directly to the county treasurer. In Coconino County, 80 percent of property owners pay the county treasurer directly.
"A counter-argument was how many people do we know that we're impacting, do we know that we're solving the right problem? Is this the right policy response?" McCarthy said. "We don't know how many people would have to make a really difficult decision personally because they had to make that second payment in May."
"The easier thing to do would be to just say that we're not going to have any penalties and late fees for somebody who's late on their taxes owed," McCarthy said. "But you're still going to owe them."
Those who are truly struggling to make property tax payments most likely have greater financial burdens and aren't going to find great relief from a postponed deadline or a waiving of penalties and fees.
When asked what is due to taxpayers at this time, Max Goshert, associate director of the Grand Canyon Institue, said financial security.
"Our social safety net is weak," Goshert said. "Without the recent federal support, our unemployment insurance pays less than $1,000 per month, and would not cover somebody who worked only 25 hours and lost their job through no fault of their own. This program is one of the most in need of repair to meet current needs."
"It's all about showing respect to your citizens and that there would be a shared sacrifice between taxpayers and government, not one group getting to insulate themselves from problems because they control the levers of government," McCarthy said. "You begin to lose legitimacy with your citizens and your taxpayers if you are viewed as holding yourselves above them by saying we are going to inflate ourselves from any type of negative reaction to this so you're going to sacrifice more so that we don't have to sacrifice at all."