Tax breaks for some mean tax hikes for others.
That’s a roughly $4-million reality underlying the town’s decision to postpone further discussion of a variety of tax breaks for senior citizens until the fall. The tax breaks were proposed to the Board of Selectmen during the winter’s budget discussion by OWLS president John K. Fisher.
Tax breaks for seniors are an attractive concept, but the money would have to be “found” in the budget somewhere — either through reduced spending or higher taxes on younger families.
“Giving the seniors back a little is something I could support,” said Selectman Bob Hebert. “But I can’t support it if we’re going to have Grand List growth of 0.8% and school board budget increases of 3%-4%-5%.”
The selectmen discussed potential senior tax breaks at their June 20 meeting, but made no decisions. They plan another discussion for Oct. 10.
The board reviewed a report from Assessor Al Garzi on the three tax programs the town currently offers senior citizens, at a cost of about $3.9 million: $1,739,000 for a senior tax credit; just under $2,107,000 for a senior tax deferment program; and another $68,000 for a state tax deferment that the state grants to seniors but leaves the town to finance.
“This does not make this look any better,” Selectman Steve Zemo said.
Senior tax credit
Benefiting the largest group of older Ridgefielders is the senior tax credit program — a $1,048 reduction of annual taxes that any taxpayer over 65 is eligible to claim. Currently 1,675 households get a total of $1,739,079 off their town taxes under this program, according to Garzi’s report.
Fisher had written to the selectmen in February on behalf of the OWLS senior citizens group, asking that the amount each senior household gets off tax bills be increased from $1,048 to $1,200 a year.
That increase — $152 per household — would cost Ridgefield’s other taxpayers about $254,600 a year, based on current enrollment of 1,675 senior households, Garzi said.
A smaller increase from $1,048 to $1,100 — a $52 boost to the tax benefit to seniors — projects to an annual cost of $87,100 for the 1,675 senior households, according to Garzi.
“A $52 increase sounds very marginal,” said Selectman Steve Zemo. “But that’s the equivalent of a firefighter.”
“To many of us $52 is not a big deal,” said Selectman Bob Hebert. “But there’s a lot of people out there that that’s medication, that’s being able to turn the heat up…”
Zemo also noted that Garzi’s projections were based on the assumption that the number of people in the program would remain about the same.
Many homes in Ridgefield are occupied by “baby boomers” with lots of people turning 65 soon.
“We’re assuming 100 in and 100 out every year,” Zemo said. “It could jump.”
“What we see is happening is younger people moving in and older people moving out,” Hebert agreed.
First Selectman Rudy Marconi said it had been “almost 10 years” since the last increase in the amount seniors can take off their tax bills.
“We were asked by a group of seniors to take a look at this,” he said.
Another proposal the OWLS asked the selectmen to consider is a “freeze” on tax increases for taxpayers 75 and older.
Assuming taxes go up about 2% a year, and estimating that there are 949 ‘over 75’ taxpayer households that would qualify for the freeze, Garzi projected a cost of about $225,000 a year.
“Estimated cost for this program would be the average tax bill times the estimated tax increase of 2% times the estimated number of households 75 and older receiving the tax credit program…” Garzi’s report said.
Again, selectmen weren’t averse to the idea, but worried about the cost.
“We’d have to find in our budget $225,000,” Zemo said. “…The numbers get staggering when you couch it this way.”
Those two proposals are without a means test — any taxpayer in the age group qualifies.
The town’s senior tax deferment program does have a means test. The program allows hard-pressed seniors to simply stop paying their taxes, with the idea the deferred taxes will collected by the town later when the property is sold — because they’ve moved, or died and passed the property to their heirs.
The tax deferment program is currently available only to people with incomes below $55,000 a year.
The proposal Garzi reviewed would increase that income limit from $55,000 to $75,000 a year.
“Difficult to estimate but does not appear to increase deferment amount by a significant amount,” Garzi’s report says. “At present there are 47 households deferring their tax bill with a means test of $55,000.”
According to Garzi, 47 households are deferring $2,107,000 in taxes — though the taxes will eventually be collected, in the interim other taxpayers are left to make up the difference.
The selectmen liked the means test concept because the town could help seniors who really need assistance, while avoiding the problem of increasing taxes on less affluent younger families in order to reduce taxes on even wealthy seniors.
“That’s a reasonable thing — to help people who need help,” said Selectwoman Barbara Manners.
Zemo, too, felt the means test directed help to the hard-pressed seniors on fixed incomes that were at the heart of Fisher’s argument.
“When he was in he really talked about seniors that were hurting,” Zemo said.
“If there’s a household income of $45,000, and they’re holding onto their condo, maybe we should look at that,” he said.
Hebert suggested the board take more time to consider how to help seniors pressed by the local tax burden.
“I wouldn’t mind thinking about this and coming back in the fall,” he said.
Marconi agreed it was worthy of more discussion.
“There are seniors who feel we’re giving raises to employees,” he said. “They’re not getting that.”