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Partial property tax payments now permitted, "It's about treating the public right," says Simitian


SAN JOSE –Santa Clara County residents who are struggling to pay their property taxes will soon get a bit of relief, thanks to action taken by the Board of Supervisors. On a motion by County Supervisor Joe Simitian, the Board approved a plan for accepting partial payments on property tax bills.

"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 ten percent penalty on the whole amount if they don't pay up," said Supervisor Joe Simitian, who drafted the Board's action. "It seems to me that we ought to be encouraging taxpayers who are trying to do the right thing, even as they’re struggling financially."

Under the existing system, the County rejects any payment less than the total amount owed on the installment. The tax payer is then notified of the shortfall and asked to remit the balance due.

Taxpayers are currently given 10 days to remit full payment, and if they fail to do so, they are assessed a 10% penalty on the entire balance due. They then have until June 30th to pay their outstanding tax bill before becoming tax defaulted and accruing additional penalties of 18% per year. On average, approximately 5,550 bills become tax defaulted each year.

Under the new system, which takes effect next tax year, the County will allow partial payments, and only penalize taxpayers on the unpaid balance owed after that payment.

Accepting partial payments for secured property taxes was first recommended as part of a County Management Audit of the Tax Collector in 2005; but the idea never got traction until Simitian picked up on the idea after constituents brought the issue to his attention.

Simitian said he was particularly mindful of “folks who were struggling through the recent recession, caught up in the mortgage crisis and then told that, despite their best efforts, the County refused to take a partial payment.” He added, “We all understand that these taxes have to be paid; but let’s be realistic, you can’t squeeze blood out of a turnip. When people are trying to pay, let’s help them pay.”

Santa Clara County has the highest average home values in California, with commensurately high tax bills. The County's average property tax bill last fiscal year was over $9900. Property taxes often represent the largest single “lump sum” tax payment that many Californians make each year.

"This seemed like a relatively straightforward way to make our County government work better for our residents," said Simitian. "The obligation is still payment in full, and there will still be consequences for taxpayers who don't meet that obligation, but this change will allow people to make progress even when they can't pay the whole bill – a bit like a credit card balance."

“If you shop at Macy’s or Target you know it’s not rocket science,” said Simitian. “You pay what you can, you owe the balance, and there’s still a cost associated with that remaining balance. A penalty, plus interest.”

“I just don’t think it’s right to tell someone who wants to make a payment ‘We won’t take your money. And by the way, we’re going to hit you with a 10% penalty on the entire amount,’” said Simitian. “If someone wants to pay, let them pay. And while we may lose some penalty revenue, we’ll actually speed up our revenue collection by receiving these partial payments.”

“Bottom line, it’s about treating the public right,” said Simitian.