May 15 tax deadline remains, but county votes to abate late penalties

By Erin Ballard

Residents and businesses in Lyon County experiencing economic pressures caused by COVID-19 are getting some much-needed relief.

The Lyon County Board of Commissioners voted unanimously Tuesday to abate the majority of penalties for late payments associated with property taxes through July.  The due date will still be May 15.

“I think with this here it’s a way to help everybody in a situation where they’re out of work right now and can’t come up with the dollars,” Commissioner Gary Crowley said. “Imposing the full penalty for late payment of property taxes in 2020 would be unjust and unreasonable.”

The action dramatically decreases the penalties for unpaid taxes — not including energy production, utilities and railroads — to only 1% between May 16 and June 30 and 2% between July 1 and July 31. The penalties, depending on the property, were originally 2% or 4% from May 16-31, 4% or 8% in June, and 5% or 9% in July.

The commissioners contended that reducing the penalties rather than moving the due date will help a larger number of individuals and groups, including local schools, cities and other taxing districts dependent on property tax revenues. 

“This is affecting the farm and railroad economy just as much as it is businesses,” Commissioner Rick Anderson said. “I think the way we’re going at it, we’re looking at all the taxpayers in Lyon County. We’re not picking out specific people or organizations. This is better off for everybody in the county.”

“We’re all in it together,” Commissioner Steve Ritter said. 

Recently, several cities reached out to commissioners in relation to the decision. Tracy Mayor Tony Peterson urged the board in a letter April 28 against removing penalties completely for late property tax payments. He said the taxes are 40% of his city’s general fund revenue and losing it could mean furloughing employees and limiting the ability to provide crucial services.

“Although we do understand the need to support our citizens and businesses in this time of crisis, any measure that affects our June property tax distribution would be devastating to the City of Tracy and other cities in the county,” Peterson wrote. 

Balaton’s City Treasurer Roberta Joehnck wrote to the commission April 29, saying that a delay in the payments would cause irreparable damage to the city, after natural disasters and the closing of the local nursing home had depleted its reserves in recent years. 

“Balaton is unable to trim anymore. The city operates with minimal staff and dated equipment. Cash flow is a problem. Delaying tax levy payments could see the city filing for bankruptcy,” she wrote. 

County commissioner Charlie Sanow said reducing the penalties would help struggling residents and businesses while still ensuring districts would not go under.

“Some of these smaller cities and entities who can’t afford to have a delay … we can pay them a portion of whatever we get. We can do a separate payment for them and give them the rest when it comes in. They don’t need to have 100% of it the first day,” he said.

Sanow said he also didn’t think lowering the penalty would be a deterrent for those who can afford to make their property tax payments on time. 

“There’s a lot of arguments out there that people who are unemployed are actually making more money than what they were before this,” Anderson said. “I think (in lowering penalties) we’re doing a really good job to all the people in Lyon County.”

Lyon County has so far collected about $4.6 million in property taxes out of the $22.4 million expected in the first half of 2020, according to Lyon County Auditor/Treasurer E.J. Moberg. That’s a large gap, but it isn’t irregular compared to previous years, he said. However, that doesn’t take into account the pandemic and future unknowns in the economy.  

“We’re so far following normal patterns, but we do know we’re in an abnormal situation as far as what’s out there in the world,” Moberg said. “It’s not an incentive for those who can still pay on time, but it’s not harming those that are already down. You’re not kicking them when they’re down.”

In other action, the board:

• Approved a resolution officially recognizing the week of May 10-16 as Correctional Officer Week 2020. 

• Approved an abatement of 2020 taxes on a home destroyed by fire in July 2019.