As the Coronavirus pandemic grinds on, state and local jurisdictions have enacted legislation aimed at softening the economic blow to workers, renters, and families. Measures include shoring up pay for workers, eviction moratoriums, limitations on rent increases, debt reduction, deferment or elimination, and more. Given the harsh economic consequences brought on by COVID-19, we believe these measures are necessary and appropriate.
However, while some relief is provided to tenants and small businesses, there is a group that suffers without significant help from their county governments. Homeowners, and small and large businesses have made major concessions, and in the process have incurred substantial losses, yet they get very little relief from the government when it comes to taxes.
At a recent meeting called to discuss rent limitations and eviction moratoriums, I asked a city council member, “we support protections for tenants, but can you ask the county to delay property taxes while the rent limitations are in effect?” The response was predictable. “No, we cannot delay taxes,” said the Council Member. “We need that money so the city can operate.” I responded, “everyone needs money so they can operate. How can the city ask everyone else to sacrifice, but refuse to make sacrifices itself?”
I would call this cavalier attitude shocking, but it is what I have come to expect from local government. Our leaders talk in great passionate language about everyone else sacrificing, but they do not. Former Council President Ignacio De La Fuente, called me the other night and asked, “if everyone else is suffering, why don’t our elected officials agree to donate half their salaries to COVID-19 relief programs? They should help the laid-off restaurant workers, help the nurses and other low to mid-income workers,” he said. Half their salaries won’t go too far, but why not share the misery as examples of leadership?
Back to taxes. Most of the counties have declined to delay taxes. They hide behind the excuse that only the state can delay Tax Day. However, San Francisco, under the steady leadership of Mayor London Breed, has ruled that the county is closed and therefore taxpayers need not pay property taxes until May 3. Why cannot Alameda, Contra Costa and other jurisdictions follow San Francisco’s leadership and creatively find ways to delay Tax Day.
If it is true that the state has the ultimate authority, why are not the Governor and our legislature passing laws and regulations to delay Tax Day? While counties could delay taxes under the closure rationale until May, the state could use the time to pass laws to delay Tax Day.
Recently, the California Judicial Council issued an emergency rule that prevents residential evictions, no matter the reason, for 90 days after the state-of-emergency has been lifted. If 90 days is good reprieve time for tenants, then give taxpayers 90 days delay on their taxes.
Requiring tax payments while tenants and small businesses are not paying rent is especially problematic for small property owners who have little, or no, cash reserves, and even for larger property owners that may exhaust their reserves during the pandemic. We are greatly concerned that these people may be forced out of business, with the result that even when the virus has dissipated, there will be significantly fewer places for people to work and live.
To his credit, Alameda County Treasurer-Tax Collector, Henry Levy has indicated a preference to liberally apply relief from late fees and interest for Alameda County residents who cannot pay their taxes on April 10. But that is not good enough, we need clear rules that say that taxes are not due.
If everyone else must tighten their belts, so too must cities, counties and the state. April 10 should not be Tax Day!
Greg McConnell is the President and CEO ofThe McConnell Group.