Senior tax law change offered

Task force sends more limited version of relief to council

February 07, 2007|By Larry Carson | Larry Carson,Sun reporter

Howard County's senior property tax credit law should be replaced by a new, more limited tax relief law, a citizens task force appointed by the Howard County Council voted to recommend yesterday.

The vote, which would reduce the county's revenue loss, drops a political hot potato on the new County Council - four of whose members took office after the current law was unanimously approved Oct. 30, one week before elections.

The council is to get the panel's recommendations Monday, and must decide by Feb. 22 whether to submit legislation to change the law, which has received vigorous support from some older homeowners.

To qualify for a county property tax cut, the task force recommended that homeowners meet a new income ceiling for eligibility of four times the federal poverty level, which this year would equal $54,760. In addition, the group voted to add an eligibility asset test matching what the state requires for its circuit-breaker property tax relief program. Unlike the current law, the committee's proposal would not freeze anyone's tax bill but would cut each year's property tax by 25 percent. That would mean that a homeowner's bill likely would grow slightly from year to year, as reassessments are phased in. A freeze has been declared unconstitutional in an informal opinion by the Maryland Attorney General's office.

"I thought the process worked well," a smiling chairman, Ted L. Meyerson, said after the session yesterday in the George Howard Building.

Patrick Dornan, an outspoken advocate for tax cuts, opposed the asset test, but he said after the session that he supports the committee's recommendations.

"Seniors are going to get a tax cut, and that's important. That's huge," he said.

Current law

The current law applies to homeowners 70 and older with annual household incomes of less than $75,000 a year. Starting with July's tax bills, it would reduce county property taxes 25 percent and freeze the bill for as long as the person owns the home. The county also has a tax deferral plan for homeowners 65 and older with less than $75,000 in household income, and the state also offers tax relief for homeowners earning less than $60,000 a year.

The task force

The County Council created the task force last month to re-examine the law and recommend changes to the income ceiling or the tax-cut percentage. The panel was given a deadline of next week in order to provide the council enough time to approve any changes before tax bills go out in July.

Some committee members have said they feel the law was hastily conceived for political purposes, while others defend it as a way to keep older people in their homes, rather than selling to young families with school-age children who require more county services.

The first vote yesterday was whether to recommend repealing the current law, and committee member Frank Chase was part of a majority who supported that.

"We're trying to make a silk purse out of a sow's ear. It's a bad bill. This bill was a farce from the first," he said.

Don Dunn, another member, warned that the "main purpose of the bill was to provide and meet our social obligations to a group of citizens who are in distress," but he was outvoted 8-3.

A lengthy discussion of the income limit ended with the formula for four times the federal poverty level - a number that could change over time. Curt Curtis argued that lowering the income ceiling does not help more low-income seniors. "It just penalizes people with higher incomes." The state circuit-breaker program has a $60,000 income ceiling, and it is not clear who might benefit from a county program with a lower ceiling, he said.

But the committee chose the lower income level.

Meyerson proposed a $300,000 asset test, excluding a person's home and formal retirement accounts, but the committee decided to match the state's asset limit. That is $200,000, but a General Assembly bill is proposing to raise it to $300,000.

Repeal urged

Last week, committee member Peter J. Rogers explained why he wanted to repeal the current law.

"I'm a Republican. I don't like taxes," Rogers said.

"I think this bill is fundamentally flawed. I would move to rescind it. It's dangerous to have different groups pay different things," he said because it "breaks up the community."

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