Brown Testifies In Favor Of Property Tax Deferrals

Bill Would Benefit Elderly And Disabled Homeowners

March 01, 1992|By Adam Sachs | Adam Sachs,Staff writer

ANNAPOLIS — Westminster Mayor W. Benjamin Brown told a House committee Friday ofan elderly man who complained at a City Council hearing that rising property taxes could drive him out of his home.

Brown said he wanted to grant some relief, but discovered the law didn't allow any special preferences for elderly homeowners on property taxes.

That discovery was the genesis for the bill Brown has carried to the legislature, via the Carroll delegation. The mayor testified before the Ways and Means Committee on the bill that would permit Maryland's 154 municipalities to allow elderly or disabled homeowners to defer payment on increases in their annual property tax assessments.

The measure would allow elderly and disabled homeowners to stay in their homes and spend money on more immediate needs or desires, Brown said.

Brown said he knows elderly Westminster residents who can't afford prescription medicine, but who are determined to stay in their homes until they die.

"I think elderly persons should spend their money while they're here," he said. "They shouldn't have to suffer and do without to hang on to a house that their heirs can sell and profit from."

To qualify, a homeowner must have lived in the dwelling for at least five consecutive years, be 65 or older or be eligible for disability benefits and meet income requirements.

The program would require that a lien be placed on the property for all deferred taxes and interest until repayment.

Counties were granted authority by the General Assembly in 1988 to enact the same program. Only Montgomery County has established the program.

The Maryland Municipal League supported the bill.

"It's another tool in local government'sarsenal to provide help to elderly taxpayers, and it's discretionary," said Steve McHenry, MML associate director.

Tax assessments -- 40 percent of a property's appraised value -- would be frozen when a participant enrolls. Law caps annual increases in property tax assessments at 10 percent.

For example, the owner of a Westminster property appraised at $150,000 would pay about $500 in taxes at the city rate of 83 cents per $100 of assessed value. That homeowner would saveabout $3,700 over 10 years, assuming the assessment increased 10 percent each year and the tax rate remained stable. The tax bill at the end of 10 years would be about $1,200.

Participants would be required to pay more if a municipality raised its tax rate.

Brown said the tax break would be a good investment for municipalities, since they would recoup the money over time with interest. Also, elderly homeowners who have lived in their dwellings a long time tend to take good care of the property, he said. Once they die, the property often issold to absentee landlords.

The lien wouldn't necessarily burden heirs because the debt would be a small percentage of an estate sale,he said.

Del. Ellen Sauerbrey, D-Baltimore County, the House minority leader, told Brown she believed strongly in the concept, then asked whether he thought eligible citizens would participate.

"That shouldn't drive the decision," he responded. "It's nice to have on the shelf for citizens who need it."

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