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Finance Board Recommends Senior Tax Relief Changes

Published: June 17, 2017

At a May 25 regular meeting, the Board of Finance capped months of study and deliberation by recommending several nominal adjustments to Newtown’s Senior Tax Relief program. That review, which was requested by the Legislative Council — and the resulting recommendations — will now go back to that panel and its Ordinance Committee for further review and possible eventual action.

The local senior tax program, already verified to be the second most generous in the state, provides a structure of tiered benefits depending on a qualifying single or couple’s level of income.

Since its inception almost two decades ago, the benefit criteria has undergone changes.

Most recently, the annual benefit pool was capped at $1.65 million with a maximum of $150,000 earmarked for the lowest benefit or D tier; the council approved adding that D tier to the previously existing three; and instituted an asset verification and affidavit to help ensure that applicants who need the benefit most due to their overall financial liabilities are able to access it.

Under the current program, applicants earning between $0 and $45,000 qualify for a maximum local property tax credit of $2,525; households earning $45,001 to $55,000 may qualify for a maximum benefit of $1,750; those earning $55,001 to $65,000 may qualify for a maximum benefit of $1,300; and the most recently added tier of eligibility for those earning between $65,001 and $70,000 in reported income provides an $800 reduction.

In years where the number of qualifying credits exceed the $1.65 million fund, distributions may be prorated, or may be adjusted to provide the full benefit to the most needy while lowering the benefit in other tiers.

The final recommendation as first motioned by Chairman John Godin, was to increase the Tier A benefit by $200, the tier B benefit by $150, the tier C benefit by $100, and the tier D benefit by $50. His motion also included no change in the residency program, existing funding allocations, or the asset test.

Tiers would continue to be subject to proration, if required. Vice Chairman James Gaston moved to amend the motion increasing the income range in the third tier to $75,000, which was seconded and passed 3-2 with Mr Godin and Sandy Roussas opposing.

Board member Aaron Carlson was absent.

After learning that up to ten applicants might be disqualified because they owe back taxes — even if they are on a payment plan with the tax collector — Mr Gaston motioned to make the approved recommendation to the council, including requesting a discussion in consideration of those taxpayers who are actively engaged in a payment plan addressing an active tax delinquency.

That motion passed unanimously.

Public Comments

The finance board was approached in late 2016 with a request to thoroughly review the benefit, analyze its impact and implications to local taxpayers, and recommend, if appropriate, any changes to the program for consideration.

The board approached that charge thoughtfully, devoting in excess of a dozen hours over numerous meetings to deep diving aspects of Newtown’s program, reviewing state guidelines and available options that may not be in place, or fully implemented in Newtown, as well as canvassing other towns offering similar benefits, understanding how the program is administered by the local tax collector, and crunching pages of gathered data.

Finance officials approached finalizing their recommendations with four goals in mind: not increasing the program’s complexity; retaining long-term senior residents; supporting seniors who qualify as most needy; while maintaining the $1.4 million fund, with an eye on current state budget challenges that could significantly reduce intragovernmental revenues, possibly and negatively impacting the program.

Prior to deliberation, the board heard from residents, including Steve Rosenblatt, who supports a uniform tax credit benefit to all senior taxpayers. Rudy Magnon then pointed out the recent fund surplus, suggesting officials might do more to promote the benefit to ensure the town does not lose more seniors who may be considering relocating to the South.

Paul Mangiafico told the finance board that maintaining or enhancing senior tax benefits was needed based on conversations with many seniors in town, and encouraging the board, saying, “It’s the right thing to do.

First Selectman Pat Llodra told finance officials that as a fiscal conservative, she did a lot of thinking about this program. She said she is an advocate for what the town currently offers, and the community collectively has an obligation to help those who need it.

Mrs Llodra said she talked to Redding and Ridgefield officials, whose two towns are the only ones in the region extending a tax relief program to all seniors.

She learned that the Redding program began as a retention strategy to control school populations. And while the influx of new school-age families has dwindled, like in Newtown, Redding is continuing its program because they recognize it is an investment in the community.

She received similar feedback from Ridgefield officials, who said the blanket benefit to all seniors is considered an investment in the both community’s culture and economy.

“Redding and Ridgefield believe retaining that cultural value enhances commerce in their community,” Mrs Llodra said. At the same time she cautioned that “entertaining a program that will cost millions more is challenging in the current economy.”

“Look at this as a way to further invest in our community and expand our brand,” with a goal of retaining and attracting more seniors to Newtown, she said.

Finance Director Analysis

During the meeting, Town Finance Director Robert Tait presented information he compiled from the Tax Collector’s Office comparing and contrasting application trends between last year and this year. He said currently there are 92 new applicants to the program over last year, and 85 of them were approved as of May 24.

Two were denied because they exceeded qualified assets, one did not meet the minimum length of residency, one was under the age minimum, and three were deemed over the income limit. Mr Tait also learned that 61 of those receiving benefits last year did not qualify this year — five due to back taxes owed, 16 who are deceased, six who did not reapply, four who moved, 23 who were deemed over income, and seven who sold their properties.

There are 44 more applicants requesting and qualifying for the tier A benefit this year, and six more at tier D. Tier B applications declined by nine, and the tier C number of 106 was unchanged between 2016 and 2017, Mr Tait reported.

There were also 11 more applicants qualifying for a partial benefit, which can be awarded to qualifying taxpayers who are partial owners of their properties, or who meet a 25 percent minimum tax threshold.

Mr Tait also developed data by working with the Registrar of Voters Office, and utilizing the grand list to determine how many individual seniors age 65 or older currently reside in town (4,614), and the number of 65+ senior households (3,283).

The finance director told the board that he was then able to determine that after those considered renters, 2,530 65+ senior households pay property taxes in Newtown, and minus those already receiving senior tax benefits, there are still 1,827 households whose owner or owners may qualify for one of the tiered benefits.

Mr Tait said that 1,088 of those households count owners between the ages of 65 and 74, while households with owners over age 75 number 739.

Following the meeting, resident Larry Passaro said he is still hearing a lot of concern from his peer group that seniors are disproportionately paying for local services they are not receiving, while others see their taxes as benefiting the community overall.

Ultimately, Mr Passaro said, no decision on a senior tax program will ever make everyone happy.

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