The Board of Supervisors in Santa Clara County has voted unanimously (5-0) to allow residents to pay their property tax bills at least in part if they can't pay immediately the full amount. The decision was made on Dec. 6, and the new system will be implemented on July 1.
"As things stand now, if a person is having a rough patch and sends a property tax payment less than the total amount owed, we send that payment back -- and then threaten them with a 10 percent penalty on the whole amount if they don't pay up," said County Supervisor Joe Simitian in a press release. Those people who are trying to do the right thing should not be punished, he added; rather, they should be encouraged to complete their payments.
If a short payment is received, taxpayers are currently given 10 days after the due date to come up with their full payment, and if they fail to do so, they are assessed a 10 percent penalty on the entire balance due. Then, they have until June 30 to pay the rest of their tax bill before being considered in default and slapped with additional penalties of 18 percent per year.
According to Christine Prior, Simitian's deputy press secretary, an average of 5,550 tax bills (approximately $28.3 million) in Santa Clara County become defaulted every year. This is approximately 0.63 percent of the total secured tax revenue levied, which is about $4.5 billion.
The new system, which begins with the next fiscal year that runs from July 1 to June 30, 2018, allows partial payments and will only penalize taxpayers on the unpaid balance owed following their partial payment.
Santa Clara County has the highest average home values in California, creating high property tax bills. The county's average property tax bill last fiscal year was more than $9,900. Property taxes often are the largest single tax payment that many Californians make each year.
"This is an issue members of the public have raised with me for years," said Simitian, adding that it has been a hot-button topic dating back to the recession in 2008. "Too often the system forgets that it is there to serve the public. ... They will still have to pay 100 percent of their payments."
Simitian said the benefits of the new regulation outweigh any downsides. "While we may lose some penalty revenue, we'll actually speed up our revenue collection by receiving these partial payments," he said in the press release.