Darien board OKs tax deferment

Unanimous vote for program

The Darien Board of Selectmen voted unanimously on Tuesday, April 21, to approve the adoption of a tax deferment program as detailed in the governor’s executive order for eligible taxpayers.

The board will now forward its recommendation to the Representative Town Meeting for its consideration and approval. The RTM is meeting on April 27.

Due to the impact of COVID-19, the state of Connecticut has made it possible for municipalities to offer some relief to property taxpayers.

There are two programs from which they can choose: a tax deferment program and a low interest rate program.

The tax deferment program allows municipalities to extend the payment deadline until 90 days from the due date.

Currently, taxes due on July 1 must be paid no later than Aug. 3, or interest begins to accrue. Adoption of the new program would extend the deadline for payment without interest to Oct. 1. A taxpayer wishing to take advantage of the deferment program must certify the loss of income. A residential property taxpayer would have to certify a reduction in income of at least 20 percent.

A landlord taxpayer must provide documentation that he or she has, or will, suffer a significant revenue decline, or provide documentation proving that he or she has provided commensurate forbearance to tenants or lessees — which for this program means a deferral of 25 percent of rent for the 90 days after its due date, a deferral of one month’s rent to be paid over the 90 days or a similar level of forbearance. The tax collector must sign off on the residential and landlord requests.

The low rate interest program would allow the municipality to reduce the rate of interest on delinquent taxes from 1.5 percent per month (18 percent per annum) to 0.25 percent (3 percent per annum). This lower interest rate would be applicable for 90 days only. There is no qualification process for residential taxpayers — it would be provided to all.

At the Board of Selectmen meeting, Darien First Selectman Jayme Stevenson was the only member who attended in person.

Town Finance Director Jennifer Charnesky said after a lengthy discussion of the two program options, the Board of Finance recommendation was to go with a tax deferral option only, and only with the RTM eligibility guidelines.

The main concern when making the decision was cash flow pressure, according to Charnesky.

“We need cash in July, August and September,” Charnesky said. “The concern was if we open it up to everyone, people in this town are very financially savvy and will not necessarily pay early if they don’t need to. If they can wait until October, many probably would. It would be an incentive for people who do have the ability to pay, to delay and put pressure on our cash flow.”

There’s a portion of residents’ taxpayer base that has their property taxes escrowed, and under the governor’s orders, those escrow payments must be made, according to First Selectman Stevenson.

“There is no option for that if the homeowner or the business mortgagee is current on their mortgage,” Stevenson said.

About 34 percent to 35 percent of Darien taxpayers escrow their taxes.