Senior tax cut sees results

Finance Department reports average savings of $539.73

October 14, 2007|By Larry Carson | Larry Carson,Sun reporter

Just more than 500 elderly Howard County homeowners have received a collective $272,563 in property tax breaks, and 300 others could still benefit, according to a report given to a citizens committee studying whether to make more changes in the Senior Tax Credit law.

As of Tuesday, the average savings was $539.73 per household, said Linda Watts, chief of the Bureau of Revenue in the county's Department of Finance. But with 300 more qualified applicants still awaiting word from state tax officials, that average could change, she said. People seeking a county tax credit must also apply for a state credit.

Members of the committee, called the Senior Tax Credit Task Force, seemed unsure what to make of that news at a meeting Thursday, but they are to decide later this month whether to ask the County Council to revise the law again.

Some said they wondered why the total of 1,086 applications received through Oct. 9 didn't come closer to the roughly 2,400 county seniors early estimates predicted would qualify for the program.

The law amended by the County Council in the spring gave a 25 percent property tax break to people age 70 and older who own their homes, have household incomes of less than $68,450 and assets of less than $500,000, excluding their homes.

Others said they wondered if the 2,400 estimate was simply inaccurate, and were happy to see that because of the county's new law, more residents also got state property tax reductions.

Still others said they wished the process could be made simpler, like the original concept unanimously approved by last year's County Council in the heat of an election campaign. That law cut property taxes 25 percent and froze them permanently for people 70 and older with incomes of less than $75,000 a year. After the election, the new council created the committee, which recommended changes to limit the tax break - and the revenue loss to the county.

"We did a very good thing here, but we could have reached more people," said Patrick Dornan, a committee member and sharp-tongued tax critic who in 2003 led a major petition drive against the county's 30 percent income tax increase.

"We must not lose sight of the fact there was a measure of success, in that more people applied to the state and got more [state] refunds than ever before," said Ted Meyerson, the chairman of the group.

Watts gave the group the latest statistics. She said county residents collected 33 percent more from the state's Homeowner's Tax Credit program - a jump to $1.6 million in 2007 from $1.2 million in 2006.

Some 184 Howard seniors who applied got such a large state tax break that they didn't qualify for more credits from the county. The county denied credits to 62 applicants, 22 applications were incomplete and 13 were withdrawn. The county is accepting applications until Oct. 31 because the state delayed its deadline until then, though next year's deadline is Sept. 1.

One committee member saw the statistics as a validation of efforts to aim the program more at lower-income homeowners.

"It's clear from this that we didn't subsidize people in McMansions," Colin Burke said.

But Dornan pointed out that based on charts Watts distributed, many applicants have homes with high values, though they have limited incomes. "Some people got hammered by increasing real estate values, with little income."

Don Dunn, another member, asked for a show of hands to see how many committee members got credits. No one raised a hand.

"I wonder if we're the right group to be talking about this," he said.

Watts also listed the ways the county worked to enroll seniors and inform them, from postcards sent in every property tax bill to one-on-one work sessions with county employees to help sometimes-confused seniors fill out the forms.

"We did everything we could to make this an easy process for the people who came in," Watts said. She said she was surprised at the number of older homeowners who had no significant income beyond Social Security.

Some committee members wondered if the applications could be simplified. The county uses its own application form rather than the state form, because the asset test limits are different - $500,000 for the county and $200,000 for the state. Watts warned that if the council changes the form during the winter, the Finance Department won't be able to produce new ones in time for the spring tax season, meaning more confusion and delays.

Susan R. Buswell, a former state delegate, said it might be too soon to consider more changes in the law.

"I think the county did an amazing job in getting [information] to people," she said. "Word takes a long time to get out. I don't think our success can be measured in one year."

larry.carson@baltsun.com

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