Tax Deferral for Seniors Nixed as 'Circuit-Breaker' Exemptions Doubled

The Barrington Town Council, in split votes, favors hiking the tax break for the lowest-income seniors, but ends the effort to start a separate tax-deferral program for seniors,

The effort to start a senior tax-deferral program in Barrington ended Monday evening, May 6. 

Approximately 90 lower-income seniors, however, saw their “circuit-breaker” tax-credit exemptions doubled by the Town Council.

Both votes on the tax breaks were split: 3-2 against the senior tax deferral; 3-2 in favor of doubling the exemption.

Town Council President June Speakman, Town Council Vice President Kate Weymouth and Town Councilor Bill DeWitt voted against the tax deferral; Town Councilors Cynthia Coyne and Ann Strong voted in favor.

Speakman, Weymouth and Coyne voted in favor of doubling the exemption; DeWitt and Strong voted against amending the ordinance.

Feedback from the Committee on Appropriations seemed to play a role in quashing the tax-deferral program. It had been sent to the COA by the Town Council for its reaction. 

The response by the COA was lukewarm, with two members abstaining from weighing in on the program. And even the two COA members who favored it, Geoff Grove and Joel Hellman, had some reservations; Chair Kathy Cadigan did not favor the program.

Cadigan, for instance, said the program did not seem to provide sufficient tax relief to homeowners most in need.

Grove said he supported the program even though he viewed the deferral as equivalent to a reverse mortgage that may not necessarily be in the best interest of homeowners.

Hellman also said he supported the program although he didn’t see it as being advantageous for senior citizens in its current structure.

The senior tax-deferral program would have deferred only the “incremental real estate tax increase" for residents after age 70 – not the entire real estate tax. It would have effectively “frozen” taxes after an “election date” until a future date of 10, 15, 20 or more years down the road or the end of life.

At that point, taxes would have come due with 12 percent interest non-compounded. There would have been income and assessment limits. The tax also would have come due within 6 months of the death of the qualified resident, with the transfer of the property to another person, upon written request of the applicant to be removed or at the end of the elected term.

Strong made the motion to continue the process of making the tax-deferral program a reality; it would have required some enabling legislation from the General Assembly. 

Coyne, who seconded Strong’s motion, said: “It would be another option for seniors” needing some tax relief. 

Margaret Kane, who proposed the tax-deferral program several months ago as chair of the Senior Services Advisory Board, said: “It does help some people” who are in a different segment of the population “than the circuit-breaker. It gives them another opportunity" for tax relief to help them keep their homes in Barrington, she said.

All of the participants in the “circuit-breaker” program are 65 and older, said Finance Director Dean Huff. All of those property owners have household incomes under $28,000 a year.

The lowest-income property owners – those who earn under $16,000 a year -- now will get a tax credit of approximately $3,000 instead of $1,500. Property owners with incomes between $16,001 and $20,000 will get an approximate $2,350 tax break. Homeowners with incomes between $20,001 and $24,000 will get an approximate $1,700 break. Property owners with incomes between $24,001 and $28,000 will get a $1,050 break.

The tax breaks right now range from a high of $1,500 to a low of $525.

Gary Morse May 07, 2013 at 10:40 AM
I favored this senior tax deferral proposal. For every senior household who moves out, expect a family with children to move in. That momentum has been picking up speed. The biggest budget item in town is schooling those kids. Here is the irony. We are giving huge property tax breaks to Sweetbriar, Walker Farm, and potentially, the proposed Palmer Pointe development. The developer has publicly stated the assumption that they are going to get the same rental property tax breaks from the Town Council that were given to Sweetbriar. The COA has been silent on these property tax breaks. Consider that the 2013 HUD numbers for those who can apply for affordable home ownership for a family of four (two adults, two children) is currently set at $71,000 annual income, while the circuit breaker program is capped at $28,000. An affordable rental for the same family is set at 80% of $71,000, or $56,800, more than double the highest level of Barrington's circuit breaker program. While we are accommodating new families moving into affordable properties with property tax breaks, our seniors who have put in years of investment are being told that newcomers will get priority. I trust that the Town Council and COA will consider a similar hard line position when it comes to a vote on property tax breaks for Palmer Pointe.
P. Dulchinos May 07, 2013 at 11:53 AM
Gary - How about a property tax freeze in return for a 30 year deed restriction for these folks? Before we consider another tax payer subsidized housing project we should take care of those LMI residents already living in Barrington.
Gary Morse May 07, 2013 at 12:45 PM
Paul, There is the open issue on such proposals as to whether they violate the state constitution's fair burdens clause. It's OK to segment all "over 65 senior populations", or all populations of people in similar low income groups. But it is an open constitutional question as to whether you can give disparate property tax treatment to people in similar circumstances. For example, could the town give special property tax breaks to some people earning $71,000 per year, and who live in an affordable home, but not give it to all residents in town earning $71,000 who own a home? The question of how to assess affordable homes is laid out in the statutes that the assessment is based on the specific covenants of the deed restriction (i.e. what is the hypothetical price the home could be sold for based on the limiting factors in the affordable deed restriction covenants). To approve special tax treatment beyond the "hypothetical affordable sales price" might raise a constitutional conflict. By state law, all homes in town must be assessed on the "full and fair" value, which is defined as the hypothetical sales price in a market based sale.
lancer May 08, 2013 at 01:34 AM
A really novel idea for the council may to consider offsetting cuts in spending


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