Prop 2 1/2 Exemptions for Seniors
I just googled “Prop 2 1/2 Override Exemptions Seniors” and got The Eisenthal Report at the top of my list — this links to a February column. There’s some really interesting back-and-forth about the political use of the exemption and its potential cost.
Essentially, the Report warns of the cost of cutting the tax, while saying it is “disingenuous” in that it will benefit very few people, reduce revenues, and shift the burden of taxation onto working voters, making overrides even less popular than they are. He also says that they would benefit wealthier seniors more than poorer, saying “In addition to being older than 65, an eligible property owner would need to have annual gross income of less than $60,000 and the annual property tax bill would need to be greater than 10 percent of gross income.”
So, if I have a house worth $1.3 million in Newton, and I make $59,000 per year in investment income, and I pay more than $5000 per year in property tax, I benefit. But if I live in Beverly in a house that assesses at $330,000, and I am taking a pension and IRA distributions (etc.) of $40,000, if I pay less than $4,000 in property taxes, no relief.
The thing is, I think their should be an exemption system. What any property tax exemption for the elderly needs to be is a net that keeps seniors from losing their homes to the state, and that shouldn’t be so hard to work out. I’m thinking of people in Gloucester whose houses assessed for $45,000 a few decades ago, now living on $25,000 per year, and found themselves living in a house “worth” over $200,000. If property tax assessment really forces people to move out of a community, then clearly there’s a problem. It shouldn’t be allowed to lower people’s quality of life below a certain standard.
It doesn’t help that a lot of today’s elderly are carrying way more more debt than their predecessors.
The exemption, as it stands, looks like a brilliant political tool — if seniors aren’t affected by an increase (or if they believe they aren’t, or if there is a limit mandated by the override bill), they’ll be more likely to okay the increase. Will it work? It assuages fear in the group that is most likely to actually vote, and assuming that those votes are all informed enough to take into consideration the finer points is to gravely overestimate the American electorate. So, maybe.
Is it a disaster? I don’t think so. If we see another surge forward in real estate assessments in the next 20 years, a lot more seniors might be protected from becoming needy, meaning, in this case, too poor to afford to stay in their homes.
Is it troubling that it also means that working households are going to shoulder so much of the burden for wealthy, privileged households? We ought to be used to that by now.
What I think community leaders should do to get the operating budgets they need is link the override bills to real, palpable improvements in Senior Services. I can’t speak for other places in MA, but many of my older neighbors rely on Access vans and other municipal and county services that aren’t available to my grandparents in their little Pennsylvania town.
Another thing that might help a lot of municipalities out is to offer property tax incentives to elderly citizens for energy efficiency repairs to their homes. I have one neighbor who has my favorite house on the street, a lovingly tended natural cedar shingled cape, with an ancient furnace and what look to be the original single-glazed windows. If municipal governments give seniors some serious help in terms of permanent energy savings, they might be less hostile towards school spending. And we get a greenhouse gas reduction benefit, and an energy conservation benefit, and a reduced fossil fuel use benefit out of every house that is brought up to modern efficiency standards.
