Council on path to trim tax cut

Majority seems to favor a limit on break for seniors

March 28, 2007|By Larry Carson | Larry Carson,sun reporter

A bill designed to limit property tax cuts granted older Howard County homeowners appears to have majority support on the County Council after a vigorous debate of the issue.

Although amendments are likely before the April 4 vote, the idea of aiming the tax cut at seniors with lower incomes and fewer assets, while limiting the county's revenue loss, seems to have backing from at least three of the five council members.

The law they want to change gives seniors 70 and older with annual incomes less than $75,000 a 25 percent county property tax cut and freezes their annual bill. That measure was unanimously approved by the last council Oct. 31, one week before the election.

Council Bill 10 would lower the income-eligibility ceiling for the tax cut to four times the federal poverty level for a family of two, which would work out to $54,760 this year, and would impose a $200,000 asset test that excludes the applicant's home, up to 1 acre of land and retirement accounts. The bill, sponsored by Chairman Calvin Ball, an east Columbia Democrat, also would eliminate the freeze on tax bills. The measure resulted from recommendations last month by a citizens task force.

Two other council members, Democrats Jen Terrasa, who represents the southeast county, and west Columbia's Mary Kay Sigaty, seemed to support Ball's bill at Monday's legislative work session, while Ellicott City Democrat Courtney Watson and western county Republican Greg Fox were critical.

The fate of another Ball-sponsored tax-relief bill - Council Bill 12 - is uncertain. That measure would expand coverage for lower-income homeowners under the state's circuit-breaker program by increasing the income-eligibility limit to $56,000 from $40,000 and doubling the house value covered to $300,000 from $150,000.

If passed as written, Council Bill 12 would cost the county up to $6.5 million in revenue, Sharon Greisz, the finance director, told the council members Monday. Members did not discuss that bill, but Ball said he introduced it before knowing the cost. Ronald Weinstein, the budget director, said Council Bill 10 would reduce the annual revenue loss from the county's senior tax cut bill to $1.5 million from $3.5 million.

County Executive Ken Ulman said yesterday that he supports the task force's recommendations, and the issue is now "in the council's court."

"We put those recommendations into our budget assumptions. Anything beyond that will be further reductions from requests," which are now more than $20 million over expected revenues. Ulman is to present his first operating budget April 16.

Council members expressed a range of opinions at their work session Monday afternoon.

Fox and Watson argued against the changes included in Council Bill 10, saying voters who saw a new law enacted unanimously just a few months ago should not see it reversed or changed before it takes effect in July's tax bills.

"I don't see it as incremental improvements. I see it as incremental mistakes," Watson said about Ball's bill.

"In a way, we're just repeating the same mistake," she said, referring to criticism that the current law was a hastily considered political ploy pushed last year by Christopher J. Merdon, who was Republican council chairman and a county executive candidate.

At the other extreme is Sigaty, who favors repealing the tax cut and authorizing more study of the issue.

"I have yet to see any clear indication there is a need this [existing law] would hit," Sigaty said. "Setting up a special tax group by age is bad policy."

Ball took a middle position.

"The recommendations we have before us are an improvement," he said during the spirited debate. Ball, the only member of the council who voted on the original bill last fall, had suggested amendments then that would have similarly limited the tax cut. He also called for more study.

"If we know there's a bad bill and we can make it better, we have to take that responsibility," he said.

"I don't think it's that bad of a bill. How much harm are we going to do by letting it take effect for a year?" Watson replied. Ball argued that letting residents get used to the current law and then taking it away, if it proved too expensive or unfair, would be worse than changing the law now.

Fox said an asset test could hurt seniors who saved for retirement before 401k and IRA accounts were available. He said he would consider a compromise, however, and suggested limiting an applicant's total tax cut to prevent any one homeowner from getting too big a benefit.

"We shouldn't be governing by task force," he said, referring to the citizens committee.

Sigaty said the county already helps lower-income homeowners, who can apply for tax relief from the state's programs or can defer county property tax increases under a law passed in 2005.

"Howard County has already done a good job to help people in need," she said.

Don Dunn, 78, a retiree who served on the citizens task force, wants the current law to remain in effect and said he is disappointed at the efforts to change it.

"It's anti-senior legislation," he said about Ball's bill.

With so many changes being discussed, he said, "I don't know of a single senior who has any understanding now of what's going on."

larry.carson@baltsun.com

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