Crowded forum underscores seniors' interest in tax relief
Updated 11:55 am, Thursday, February 7, 2013
The Fairfield Senior Center nearly ran out of space for a forum Wednesday morning on changes to the town's tax relief program for senior citizens.
"It is a big house," Ross remarked to Flynn as he walked into an activity room at the center, where about 60 seniors attended the hour-long forum.
The Representative Town Meeting in late January approved changes to the program, many of which made it more generous, but a few seniors said local property taxes and living expenses have been rising faster than cost-of-living adjustments to Social Security and other fixed income they have.
After the forum, Irene Petitti said she thought Ross did a good job explaining the changes and was grateful to the RTM for approving them. "Something is looking up for a change. We need hope," she said. "The town is definitely helping us. They've been there all along for me. I'm glad."
Petitti, though, said the cost of heat, electricity and food continues to rise and that "money goes pretty fast."
"It gets depressing out there sometimes," she said.
Ross said the RTM's decision to increase the amount of tax credits and income eligibility for the senior tax relief program are designed to help offset the rising cost of living. He said the most significant changes approved by the RTM on Jan. 28 were to the tax credit option, which is one of three options for tax-relief offered by the town to senior property owners.
Tax credits now range from a cap of $1,400 for seniors whose annual household income is from $50,601 to $70,000, to a cap of $5,000 for seniors whose annual household income is no more than $16,700.
Before the changes, income eligibility for the credit program was $60,900 for a married couple and $44,000 for a single senior, and the credits ranged from $900 for either a single senior or married couple with annual household income from $44,001 to $60,900 to $3,900 for a single senior and $4,400 for a married couple whose annual household income was no more than $14,500.
Ross said the program no longer differentiates between single and married seniors, and now requires that seniors pay a minimum percentage of their full property taxes. The percentages range from 67 percent for seniors whose income is $16,700 or less to 15 percent for seniors whose income is from $50,601 to $70,000.
As an example, seniors with annual household income in the lowest bracket and a tax bill of $10,000 would not eligible for the full $5,000 credit because they would have to pay 67 percent of the tax bill, or $6,700, Ross said.
Ross said annual household income is defined as "all income, including Social Security."
The other two tax-relief options offered by the town -- a tax freeze and tax deferral -- are far less popular. The RTM raised income eligibility on those programs from $49,600 to $50,600 for the freeze, which is good for six years, and from $77,800 to $80,000 for the deferral, which is similar to the freeze but involves a lien on the property for tax increases that weren't paid. Ross said most seniors don't like the freeze option because they get more of a tax savings on the credit program and don't like the tax-deferral option because a lien is placed on their property.
Seniors won't get less tax relief in the next fiscal year than they're receiving this fiscal year if their annual household income isn't significantly higher, Ross said.
The RTM also raised the total asset limit for the program from $500,000 to $650,000, not including the value of the senior's primary residence, Ross said. "It's been a bit of a problem for some people," he said of the previous $500,000 cap on assets.
Another significant change, Ross said, involved seniors with significant medical expenses. Now, if seniors spend at least 30 percent of their income on medical expenses, those costs can be deducted from their qualifying income for the program. Before, seniors had to pay at least 40 percent of their income in medical expenses to be eligible for that deduction.
Lastly, the RTM decided the overall cost of the tax-relief program cannot exceed 2 5 percent of all real estate taxes levied by the town. Before, the figure was 4 percent. About 1,600 senior households are on the program and it now costs from $3.1 million to $3.2 million, Ross said.
Thomas McCarthy, the RTM member who served as chairman of the Senior Tax Relief Committee, said the cap on the overall cost of the program was lowered from 4 percent to 2.5 percent to make people feel more comfortable with raising credit amounts and income eligibility requirements. "It's just kind of a check against ourselves," he said.
He said raising credit amounts and income eligibility requirements could have been "difficult to sell" to fellow legislators without a safety net built elsewhere into the program. "The idea here was to make sure ... it didn't go too far," he said.
McCarthy said the 4 percent cap would have translated into a $9 million expense for the program in the current fiscal year, while the program only cost about $3.2 million. "We're really in no danger of bumping our head on that ceiling, and I still don't believe we are," he said.
If the overall cost of the senior tax relief program exceeds 2.5 percent, however, McCarthy said tax relief would then be pro-rated across everyone who is on the program.
Seniors can apply for the tax-relief program until May 15 at the Assessor's Office in old Town Hall, and those already enrolled in the program need to reapply this year, Ross said. In the future, seniors will reapply every two years unless their annual household income changes. "This year, you're all coming in again. Then it's going to be every other year," he said.
In most cases, seniors need only to bring a copy of their federal income tax return and Social Security Form 1099. To be eligible for the program, seniors had to be at least 65 years old on Dec. 31, 2012.
Flynn said he had not expected so many seniors to come to Wednesday's forum.
"Obviously there's a lot of interest to it because they were aware the RTM had changed things and they wanted to know how it impacted them ... This meeting was clearly something that had value to it," he said.