Tax credit panel votes to hold off on changes

November 02, 2007|By Larry Carson | Larry Carson,Sun reporter

Reversing last week's close vote, Howard County's Senior Tax Credit Task Force wrapped up business yesterday with a 7-3 vote to recommend not changing the county's new property tax program for at least a year. The panel also recommended reconvening next year to examine a full year's operations.

"The mandate was to help those who most needed help. We came up with a way to do that," said Ted L. Meyerson, the committee chairman, explaining that part of the goal was to minimize the loss of county revenues by getting people to also apply for state tax credits.

Last week, a slightly different cast of committee members voted 5-4 not to wait a year to change the law, which was enacted in the spring. That majority wanted the County Council to change the law to give older homeowners with the lowest incomes more of a benefit. At yesterday's final session, Don Dunn and Frank Chase attracted only one other supporter to their cause.

"It isn't over," Dunn said after the meeting.

The law allows a 25 percent property tax credit for homeowners 70 or older with incomes up to $68,450 and assets under $500,000, excluding their house. The county requires applicants to seek relief from state programs as well as from the county. County finance officials have said homeowners collected one-third more from the state's program in 2007 than in the previous year -- a difference of $400,000.

But homeowners who have incomes under $30,000 receive much more than a 25 percent credit from the state's Homeowners Property Tax Credit program, which means they get no direct credit from Howard County. County finance department figures showed that, on average, qualifying homeowners with incomes of $20,000, for example, had a tax bill of $2,500 reduced to $143 through the state program. Meyerson and his supporters argued that was sufficient relief, but Dunn and Chase believed those people should get some direct tax relief from the county.

"We do know that by hooking up with the state that an unintended consequence is that the lower the income, the lower the credit you get from the county. That was wrong and we should right that wrong," Dunn told the group.

"Let's not continue a thing that we know to be inequitable," Chase agreed.

"I'm not sure that it's unfair," said Larry Lewis, another member.

But member Peter J. Rogers said, "I'd prefer to let the program run for a full year. There are too many things going on."

Committee member Pat Dornan, an advocate for lower taxes, supported the majority view, though he, too, would like to make a few changes.

"I agree an asset test does not belong," but it wasn't worth arguing about now, Dornan said. "We've been over it as a group. Let's implement it and see what happens."

The deadline for applying for the county program this first year passed Tuesday, though county officials are still waiting for the state to process about 300 applications. The County Council is to receive the committee's report this month.

According to figures supplied to the committee last month, 1,086 people applied for the credit. Of them, 505 taxpayers qualified for an average $539.73 county tax cut, costing the county $272,563 in revenues. Another 300 applicants are awaiting state review, and 184 others got such large state credits they did not qualify for county credits.

Of the remaining applications, 62 were denied, 22 were missing information and 13 were withdrawn.larry.carson@baltsun.com

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