After debate, Hamden sets delinquent tax interest rate at 5% for the coming year

The Hamden Town Council on June 1 adopted a 5% interest rate for delinquent property tax payments after extended discussion of fairness and municipal revenue needs.

The state-recommended maximum for the tax year is 7% under Title 36 M.R.S.A.; councilors debated whether to follow that recommendation or retain a lower rate to avoid imposing a larger penalty on struggling taxpayers. One councilor argued that a lower rate helps residents in a bind; another said letting the rate stay low reduces revenue the town expected to use as an offset in the budget.

Councilor [motion sponsor] moved to amend the motion to set the rate at 4% but the amendment failed. A subsequent amendment to set the rate at 5% passed, and the roll call vote to adopt the 5% determination passed 5–1 (1 absent).

Council also approved a matching 5% rate to be paid on overpaid and abated taxes. Staff noted that the town had been budgeting interest income at 4% but that the rate can be adjusted in financial planning.

Next steps: the 5% rate will be used in tax billing and collection procedures for the upcoming tax year; staff will update revenue projections accordingly.