That was among “concerns” voiced Thursday as the Sullivan County Commission’s Budget Committee discussed a proposed “freeze” on county property taxes for homeowners over age 65 with total household incomes of $28,750 or less.
The group took no action on the issue, which met the same fate from the commission’s other two primary committees earlier this month.
County Commissioner John McKamey introduced the proposal, which calls on the county to adopt an optional state law.
In November 2006, voters statewide approved a constitutional amendment to pave the way for a state law making such tax breaks an option at the local level.
On Thursday, Budget Committee Chairman Eddie Williams led the group into a discussion of what he said are the three options with dealing with the issue of property tax relief for the elderly:
•Continue with the current state rebate program. Larry Bailey, the county’s top finance officer, said the program — which provides property tax relief to the disabled and low-income elderly — is funded solely by the state. He said about 2,200 senior citizens received a state rebate this past tax year, with $134 being the “common amount” paid to each. The income eligibility cutoff for the state rebate program is total household income of $24,000 per year.
•The county has the option, under state law, to shadow the state rebate program by funding an additional rebate to those eligible property owners, Williams said. The county could contribute funding to fund rebates up to the same amount rebated by the state. Some other counties in the state have recently chosen to do that instead of adopting the new “Property Tax Freeze Act,” Bailey said. To match what the state currently funds for the rebate program in Sullivan County would cost county coffers about $250,000, Bailey said.
•The county could adopt the “Property Tax Freeze Act,” as proposed by McKamey. Several committee members said the move concerns them because it’s hard to nail down an estimated cost to the county — and to the other county taxpayers, who could end up paying more.
Bailey said the program would also saddle the county with new administrative costs, even though the state has said it would provide some assistance in verifying eligibility. Bailey said the state would bill the county for that work, and the county would need at least one new employee to administer the program.
Two things would drive the actual tax dollar cost of the “freeze,” Bailey said: regular reappraisal by the property assessor’s office; and any future increases in the tax rate. The tax bills of property owners covered by the “freeze” would not be affected by either.
Commissioner Joe Herron said people over 65 typically have their homes paid off and have already raised their children, compared to younger homeowners trying to pay a mortgage and raise a family.
The property tax “freeze” could leave people right out of college subsidizing the ones who “should be better off” when they’ve reached 65, Herron said.
Later, the discussion turned to whether total assets play into eligibility for the property tax “freeze.” For example, would a couple with total income of $28,750 be eligible for the “freeze” even if their paid-for home appraised at $500,000 and they had $300,000 in the bank? Bailey said only income is considered, so, yes.
“People working at McDonald’s would be supporting these people,” Herron said.
McKamey has said he plans to leave the issue on “first reading” this month, meaning it won’t likely come for a vote by the full commission until Feb. 19. It would need 13 “yes” votes at that point to gain commission approval.