Date: Tue 25-May-1999

Publication: Bee

Author: STEVEB

Quick Words:

tax-relief-elderly

Full Text:

Calculating Local Tax Relief For The Elderly

BY STEVE BIGHAM

The town of Newtown is trying to determine how many homeowners are 65 years of

age or older. Tax bills, which go out next week, will provide a spot for

senior citizens to indicate their age.

Town officials are considering a revised tax relief program for the elderly.

In doing so, they need to know the total number of property owners 65 years

and older in order to determine what overall impact the plan would have on the

town.

According to Jim MacNaughton, chairman of the ad hoc Elderly Tax Relief

Committee, the tax credit would be calculated by multiplying the current mill

rate by a factor of either 60, 80, 100, or 120. Income qualifications will not

be considered under the ordinance.

Under the new tax credit plan -- with a savings of 80 times the current tax

rate (27.9 mills) -- the average elderly homeowner would benefit with a

savings of $2,232. If, for example, 1,500 residents were eligible for this tax

savings, the town would lose more than $3.3 million in tax revenue.

However, the proposal also includes a provision that no senior receive more

than 75 percent credit against his tax bill, which would limit the revenue

lost by the town, the committee said.

Scrapping The Old Plan

The committee concluded that the existing program, though ostensibly

"optional," actually operates more like the mandatory tax relief created by

the state in that it is restricted to low-income seniors. Because the salary

requirements are so low -- no more that $26,000 for a married couple and

$22,000 for a single person -- the committee viewed it to be ineffective.

Also, the committee felt that seniors of all incomes should receive a tax

break because they save the town money.

Mr MacNaughton said many of Newtown's elders have paid off their mortgages,

but are having trouble keeping their homes due to high taxes. The tax rate

continues to climb as new homes are built and young families move in. Elderly

residents, who use far fewer services than children, are getting hit hard.

"To have seniors stay in town is much more economical for the town than new

families with children," Mr MacNaughton said.

The Board of Selectmen created the panel this past spring after a handful of

residents urged the town to alleviate the tax burden currently placed on those

who have retired.

The town currently offers a $250 tax break for 136 elderly taxpayers who

qualify under the existing ordinance. The proposed new ordinance would likely

include many additional seniors.

In its report, the ad hoc committee also stated the advantage of having a

large senior population to balance off the number of young families in town.

It called the proposed program vital if the town want to retain its senior

residents.

"Seniors use no education dollars and fewer tax dollars than younger citizens

in many areas, including Parks & Rec, police, etc," the report read. "If the

average home sold by a senior is bought by a young family, each such sale

represents a financial loss to the town."

The committee also pointed to stability, volunteerism, and voting power

seniors provide to the community.

The Board of Selectmen is currently reviewing the proposed plan.