Attorney general opinion complicates tax break for elderly homeowners

Associated Press • Mar 31, 2007 at 11:33 AM

NASHVILLE - Implementing new rules to exempt some elderly homeowners from property tax hikes will not be as simple as Senate Republican Leader Mark Norris had hoped, despite overwhelming voter approval for a constitutional amendment on the issue last November.

Attorney General Bob Cooper wrote in an opinion released last week that despite Norris' claims, local governments would not be allowed the flexibility to determine at which income level a property tax freeze can go into effect.

Norris, of Collierville, said he had written the constitutional amendment with the intention of having the Legislature set the maximum income level to qualify, but to allow local government to enact their own thresholds at any point equal to or below that figure.

Cooper said the text of the amendment approved by voters does not reflect Norris' wishes.

"Nothing in the amendment indicates that the General Assembly may delegate this power to the localities," Cooper wrote. "In the opinion of this office, no authority is granted by which a locality can adopt the tax relief program at a lower level."

Norris - who has proposed a $50,000 annual income cap to qualify for the tax break - called Cooper's opinion the latest setback in a decades-long effort to create property tax relief for the elderly.

The original 1979 law to create a property exemption for the elderly fell to a legal challenge by county commissioners who feared an erosion of their local tax base.

Norris said he disagrees with the legal argument that allowing differing levels of property taxes would violate state requirements for consistent tax rules.

"That's what amending the constitution was intended to be all about last year - to make it clear that the uniform taxation requirements that everybody always talks about were not an impediment in this case," he said.

Chad Jenkins, deputy director of the Tennessee Municipal League, said his organization welcomes the attorney general's opinion. Jenkins said local governments feared the confusion of a hodgepodge of varying tax rules in all the state's counties and cities.

"It could be a mess for taxpayers," he said.

Cooper did leave open the possibility of lawmakers setting up different income caps for each of Tennessee's 95 counties based on income levels. Jenkins said the TML prefers that approach, and Norris said he will be willing to work within that framework.

"Although it will involve more state action than I would have liked, I think we'll still be able to give local governments the flexibility they need to implement this," Norris said.

The TML remains concerned about the effects of setting the income cap too high, Jenkins said.

"The question has always been, can we do it in such a way that protects other taxpayers, the folks still raising their families or trying to pay for college for their kids?" Jenkins said.

"Can we continue to provide these services, including new services for an aging population?" he said.

Norris said local governments shouldn't be as wary as they are about his proposal because it would not require any local government to participate, and because it only protects elderly homeowners against future property tax increases.

Jenkins disputed whether the implementation of the tax freeze is really as optional as Norris suggests.

"When in excess of 80 percent of your constituents statewide said ‘this is what we want,' it's unlikely there are a lot of cities or counties that are going to refuse this tax relief to their citizens," he said.

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