Council Approves Tax Relief Plan For Seniors

By Steve Bigham

Newtown seniors who meet income eligibility criteria will receive some tax relief this year. But they must act quickly.

In order to save as much as $1,000 on this year’s tax bill, those residents over 65 are required to fill out a form in the tax collector’s office by June 15.

The Legislative Council Wednesday night unanimously approved what was essentially a modification to the existing elderly tax relief program, which offered only minimal savings. Under the new plan, however, the tax savings is more significant and requires a means test.

To be eligible under the plan, the person or persons must: be over 65, have lived in Newtown for at least one year, and live in the home for 183 days out of the year. Those with household income levels between $0 to $35,000 will receive a $1,000 tax credit, while those earning between $35,000 and $55,000 will receive a $600 tax credit.

This year’s plan calls for a cap of $330,000 in revenue loss to the town, so the program is based on a first come, first serve basis. Council Chairman Pierre Rochman said the program will be reviewed again next year since it was rushed through this spring. There are still some “gray areas,” he said.

At the request of Tax Collector Carol Mahoney, the revised elderly tax relief ordinance was fast-tracked to be ready in time for this year’s tax season. As she pointed out several times during the budget season, elderly residents on fixed income are treading water as the town’s budget continues to rise. Many of them are longtime Newtown residents who are being forced to move out of town. Some are forced to borrow money or use parts of their home equity loans in order to pay their taxes.

At this week’s public hearing, several residents spoke on the issue. Resident Barbara Bailey said she takes exception to comments and letters saying “If you can’t afford the taxes, get out of Newtown.”

“When you’ve been here for 37 years and you are in your 70s, that’s not easy to do,” she said, adding that she is trying to make ends meet as a widow.

Charles Hegenauer of Chimney Swift Drive said he was not subject to a state income tax.

“Now we have a state income tax and property tax. I can’t get a break on the school tax,” he said. “It is a tax on tax. Apparently, we’re not getting enough aid from the state.”

The tax burden continues to fall more and more on the shoulders of the property owners. The taxpayers of Newtown pay 60 to 70 percent of the total bill each year. Much of that money used to come from the state, especially education funds.

But Paul Dohrenwend of 14 Orchard Hill Road said he is not crazy about the elderly tax relief idea. As he points out, the program works well at first, however, as time goes by the disparity in income levels becomes greater and greater and you have a very uneven tax base.

“I’m all for tax relief, but if you create a tax relief just because you’re 65, there’s no rationale for that,” Mr Dohrenwend said. “I pay $3,600 in taxes. If you give me $1,000 in savings, I’ve got a pretty good deal. I think you’re giving away the store.”

But town officials opted to implement this plan in an effort to keep Newtown’s elderly in town. A senior citizen requires fewer services than a family with young children.

“If I sell my home to a family with children, the town will be in worse condition than it is now,” said longtime Sandy Hook resident Mike Lucas.

Mr Rochman said the $333,000 cap was based on what the town projects it will receive in additional state aid not anticipated as revenue in the 2000-2001 budget.

The tax relief ordinance requires residents to claim all of their income, including tax exempt money.

Jim MacNaughton of 88 Poverty Hollow Road first proposed the plan to First Selectman Herb Rosenthal in November 1998. He is seeking additional tax savings for all Newtown seniors – not just those who meet a certain income criteria. Nevertheless, he was pleased with the council’s decision.

“At least it’s a start,” said Mr MacNaughton, who chaired the elderly tax relief ad hoc committee last year. “It’s better than nothing. You would hope to get broader coverage in years to come so that more seniors are covered.”

The Board of Selectmen endorsed the tax relief program several months ago before passing it on to the council.