Madison, WI Header
File #: 60350    Version: 1 Name: Suspending interest and penalties for late property tax installment payments
Type: Resolution Status: Passed
File created: 4/28/2020 In control: Attorney's Office
On agenda: 5/5/2020 Final action: 5/5/2020
Enactment date: 5/12/2020 Enactment #: RES-20-00340
Title: Suspending interest and penalties for late property tax installment payments.
Sponsors: Satya V. Rhodes-Conway, Rebecca Kemble, Michael E. Verveer
Attachments: 1. Property Tax Installment R #60350_CC Mtg. 05.05.20
Date Ver.Action ByActionResultAction DetailsMeeting DetailsWatch
5/5/20201 COMMON COUNCIL Adopt Under Suspension of Rules 2.04, 2.05, 2.24, and 2.25Pass Action details Meeting details Not available
4/28/20201 Attorney's Office RECOMMEND TO COUNCIL TO ADOPT UNDER SUSPENSION OF RULES 2.04, 2.05, 2.24, & 2.25 - MISC. ITEMS  Action details Meeting details Not available
Fiscal Note
This resolution implements a provision included in 2019 Wisconsin Act 185, that authorizes municipalities, with approval of the county, to waive interest and penalties for late payment of property tax installments due on or after April 1, 2020, through October 1, 2020. Interest and penalties accrue after October 1, 2020 on unpaid amounts. Over the past three years, the City has received an average of $167,900, in interest and penalties from the May 31st installment payment.

Under the property tax collection process defined in state law, counties pay municipalities the amount of unpaid property taxes (the “tax settlement” process) after a certain date (for Madison, because it offers installment payments, the last day that the city can collect property taxes is July 31st). The tax settlement payment date from the county is August 20th. The state law provision that authorizes the waiver of interest and penalties also authorizes counties that utilize the waiver option to delay the tax settlement payment date from August 20th to September 20th.

In 2019 (2018 taxes due / paid in 2019), $3.7 million of unpaid property tax bills was turned over to the county on July 31st. Of that amount, $1.5 million was due to the city and the remaining $2.2 million was due to the other taxing jurisdictions (i.e., school districts and MATC). However, the remaining property taxes due between now and July 31 total over $100 million. It is unknown to what extent the effect of the current economic conditions and waiver of interest and penalties will have on amounts paid to the city by July 31, 2020, and the unpaid amounts that will be turned over to the county and then paid to the city through the tax settlement process. The provisions of Act 185 that allow delay of the county tax settlement to September 20th, could have cash flow implications for the city. Projected city cash balances are anticipated to be sufficient to absorb this delay.

Suspending interes...

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