Here in Mendham Borough we know how challenging and difficult the COVID-19 emergency has been for all of us. Challenging circumstances like this teach us how wonderful our community is and reminds us that we will continue to thrive as a special place due to the contributions of our incredible residents. It also teaches us the importance to working together as team, with our institutional partners, so we can weather this storm together.
Governor’s Executive Order regarding property tax deadline extension
On Tuesday, April 28th the Governor’s Office issued Executive Order #130 permitting municipalities to extend the grace period for residents to pay their May 1st quarterly property-tax bill to June 1st without interest penalties instead of the current May 11th, due date. This was done because municipalities do not have the legal authority to independently change the date. This action is not automatic. To be in legal compliance, municipalities would have to convene their governing bodies and vote to approve a Resolution in order to enact this Executive Order.
After careful thought and extensive financial analysis, Mendham Borough has determined that we are unable to extend the May 11th deadline for our residents to pay their property taxes. Unfortunately, municipalities were not granted the same extension for paying our state-mandated obligations to the county and our school boards. Without a similar extension for the Borough, the town would be unable to comply with the law and cover these costs.
Why do residents need to pay our taxes on a timely basis?
Many people are not aware that Mendham Borough is charged with collecting property taxes from residents and then paying our tax obligations to the Mendham Borough School District and to the West Morris Regional High School District on a monthly basis. We are also mandated by the state to pay our financial obligations to Morris County on a quarterly basis. State statutes mandate that the schools and county must be paid before our municipality can collect our share of every tax dollar, which is approximately 20% of the total collected. The methodology that is established by the state for municipalities only permits us to collect what we need to pay our bills, plus an incremental amount for emergencies. In other words, municipalities, in essence, live paycheck-to-paycheck, with the “paycheck” being our property-tax dollars.
What does this mean for residents?
Unless at least 80% of the property-tax dollars are collected by May 11th, as currently planned, we will be unable to uphold our legal obligations. The schools and the county depend on these tax dollars to pay their obligations, which include teacher’s salaries, health benefits, insurance, and a host of related costs. Without access to the remaining 20%, the town will not have enough operating revenues to pay our staff salaries, health benefits, insurance and other operating costs. We are continuing to thoroughly review our cash flow analysis on a daily basis. We are working to make the best decisions we can for our residents while continuing to provide vital services.
We know that this public health crisis is hitting some residents harder than others and we ask that you email us at BoroTax@mendhamnj.org and we will call you to directly discuss your specific circumstances.