Tax Postponement Program
New Tax Postponement Program Not Recommended
On September 30, 2011, AB 1090 was signed into law as the Senior Citizens and Disabled Citizens Property Tax Postponement Law. Regretfully, in keeping with the fiduciary responsibilities of this office, the County Treasurer-Tax Collector cannot recommend participation to the Board of Supervisors.
The law creates an alternative for those persons enrolled in the previous program by establishing a county-run property tax postponement program. However well-intended, it is fundamentally flawed by not providing the County first priority for the loans made in this new program.
By their very nature, judgment liens are not secure. Without the needed security of a priority lien, it would mean that the County would have to get in line with all other creditors to recover property taxes owed to it, and be subject to a judge’s decision on how assets would be distributed. Given the state of the housing market, and declining property values, judgment liens are a risk.
Simply put, the loans provided for in the new law would not be investment-worthy. Declaring by legislative fiat that they are permissible investments does not negate this simple fact. Treasurer-Tax Collectors are investing the public’s money, and cannot and certainly should not, invest in or make loans with public money due to political or emotional pressures. Even though an investment is legal (permissible), it does not necessarily mean that it is prudent or appropriate. In making investments, this office's highest priority under the Government Code is “safety of principal.”
While this office certainly appreciates that participants in the previous property tax postponement program are clamoring for a new program, it cannot recommend participation in the one created by AB 1090.