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Late tax bills: A lesson in governance

October 05. 2013 3:43AM

On Tuesday, the Department of Revenue Administration notified municipalities that it would not begin calculating their tax rates until Nov. 7, much later than had been customary. If you heard a vague murmur on Tuesday that sounded like curses muttered through the clenched teeth of hundreds of town administrators and managers, well, that's exactly what it was.

State education aid to local governments is based on school enrollments. The DRA uses the aid levels when setting municipal tax rates. Until last year, the Department of Education had given the DRA two-year-old enrollment data. But in 2012 legislators passed a law requiring the aid to be based on attendance during the prior school year. Uh oh.

The Department of Education told the DRA it simply could not have those numbers ready before Nov. 7. Hence the Tuesday memo, which read in part, "As a result of the change in the law, the DOE will not be able to finalize 2012-2013 ADMA calculations and state adequacy aid until November 7, 2013."

"Not be able..."

The memo ignited an outcry from municipal officials. The delay would mean that tax bills could not be sent until the end of the year, well past the time when the governments would need the operating revenue those bills would generate. Some towns and cities might have to borrow money to pay their operating expenses. Immediately, the DRA brass called a meeting with the DOE brass. Two days after the memo had been sent, the DOE discovered that, lo and behold, it would be able to have those numbers ready in October after all.

Let this tale be a lesson to all of us.

The DRA stated as a matter of fact that the DOE was incapable of preparing the data in time. It also stated in its memo: "It is the DRA's determination the most reasonable way to proceed is to postpone the finalization of municipal tax rates until the adequacy aid calculations are completed by DOE on November 7, 2013."

But that was entirely unreasonable, given the dramatic financial problems it would cause for local governments.

The lesson here is that government bureaucracies are ruled by inertia unless shocked out of it by some external force.

The DOE was not going to lift a finger to make sure that tax bills got out on time. Not its problem. Nor was the DRA. Not its problem. It took local officials (and the political clout they have with legislators) to make sure that taxpayers got their tax bills early enough to keep their local governments funded.

Interestingly, no one seemed to care that the tax bills would be going out after the November elections. Wouldn't you want to know before the election if your tax rate had just gone up? Legislators might want to address this issue in the next session.


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