Leopold pushes tax relief

Senior homeowners would see savings under new legislation

February 21, 2007|By Susan Gvozdas | Susan Gvozdas,Special to The Sun

If not for the state and county tax breaks that Nancy Crabtree receives on her Pasadena home, the 71-year-old widow doesn't know how she would pay her $1,800 property tax bill.

The reductions brought her annual tax to $360, she said.

"It's very well worth it," Crabtree said. "You tell me how you can afford everything on [an income of] $1,200 a month."

Crabtree and other low-income seniors could be eligible to receive an additional 10 percent break under a bill that was scheduled to be introduced last night at a meeting of the Anne Arundel County Council. County Executive John R. Leopold has submitted legislation that would give the break to residents older than age 70 who have lived in their homes for at least a decade.

His "70-10" proposal would amount to an average tax break of $30, a small but important first step to the reductions he promised during his fall election campaign, he said.

"I consider this a down payment on a promise," Leopold said.

The legislation builds on the state Homeowner's Property Tax Credit, also known as the "circuit breaker." In that program, residents pay based on a sliding scale. If a tax bill exceeds a certain percentage of income, the state pays the remainder. About 80 percent of the people who qualify for the program are over age 60.

At least five counties in Maryland have added a supplemental credit. In Anne Arundel, the supplement provides an average tax break of $300 for low-income residents, most of whom are senior citizens. Last year, 4,038 county residents received the credit. About 66 percent, or 2,823, would be eligible for Leopold's 10 percent break. The estimated cost of the tax credit to the county would be about $75,000 annually, Leopold said.

He defended that cost, saying he already has saved the county $1 million by reorganizing county government. Those savings would help pay for the tax break during a tight budget year, he said. He hopes further changes in the administration will yield more savings and provide a deeper tax break.

Several council members, including Chairman Ronald C. Dillon Jr., Jamie Benoit, Josh Cohen and Daryl Jones, have expressed support for Leopold's proposal, noting that rising reassessments are hurting longtime homeowners.

In the northeastern third of the county, which was reassessed last year, home values jumped an average of 18.5 percent a year. The impact on homeowners is tempered by Anne Arundel's tax cap, which limits revenue growth.

Dillon, a Pasadena Republican, said his district was hit hard. Residents who bought and fixed up inexpensive summer homes on the waterfront decades ago are being socked with appraisals of up to $1 million.

"We want those people here," Dillon said. "They're our grandparents, parents, our mentors."

Crabtree is one of those constituents. She and her late husband, Stanley, bought their home for $10,500 in 1971. Her home was reassessed in December at $316,000, she said.

"It's very shocking," said Crabtree, who volunteers at the Boutique thrift store in Severna Park.

Cohen also supports the 70-10 proposal but said more needs to be done to help seniors. If the county budget allows, he said, he would like to introduce a countywide tax-deferral program similar to the one in Annapolis. Under that program, low-income seniors can apply to have property tax increases deferred until the home is sold. The new owner then would be responsible for paying the tax increases.

The trouble with any new program is that it must be publicized, Cohen said. Although the deferral program has been in effect for several years, only a handful of residents have taken advantage of it.

Cohen believes Leopold's 70-10 proposal would be more successful because it piggybacks on an already established program familiar to county residents.

That might be true, but Crabtree's co-worker at the Boutique was unaware that she qualified for the state and county tax credits.

Mary Pratrageser, 83, paid $1,800 last fall on her home in Riviera Beach in Pasadena. She and her husband, Francis, moved into the two-bedroom home in 1952. Francis Pratrageser died July 16, and Mary Pratrageser acknowledges her mind was too preoccupied with other things to search for tax breaks when she received her bill.

"You're thinking of other, more important things," she said.

Pratrageser and Crabtree said the extra $30 offered by Leopold's proposal is a good idea.

"Anything is better than nothing," Crabtree said.

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