Archives
Property-tax relief for elderly now freighted with political baggage
Mark
Reutter, Business Editor
217-333-0568; mreutter@uiuc.ed
6/13/2005
CHAMPAIGN, Ill. — Are property-tax relief programs for the elderly
justified in an age of shrinking government revenues and scaled-back
public services?
The question has taken on sharp political overtones as partisans from
both sides of the issue have made themselves heard in town halls and
legislative chambers around the country. “This issue looms larger
today than ever before,” Matthew J. Meyer writes in the current
issue of the Elder Law Journal, a publication of the College of Law at the University of Illinois at Urbana-Champaign.
Be it homestead credits, tax deferrals or a circuit breaker program,
“some method of property-tax relief has been made available to
elderly homeowners in every state and the District of Columbia,”
Meyer, managing editor of the journal, pointed out.
The first property-tax relief program for senior citizens was enacted
in Utah in 1898, and since then state and local governments have adopted
and changed tax-relief programs “in search of the ideal mix of
aid to seniors while not overburdening younger property-tax payers,”
he wrote.
A typical program will fix the tax rate of a residential property once
a homeowner reaches a certain age, usually 61 or older. Another method
allows seniors the option to place their current property taxes as a
lien against their home, effectively postponing the payment of taxes
until the sale of the home or their death.
Critics argue that such relief programs privilege the elderly at the
expense of younger taxpayers and deprive the community of needed tax
revenues. Moreover, senior tax breaks disproportionately benefit non-minority
Americans.
“White Americans are more likely to own a home than nonwhites,”
the article noted. “For the elderly, this gap is even more pronounced,
as older white Americans are 12 percent more likely to own their home
than older African Americans, and 19 percent more likely to own their
home than older Hispanics.”
But more than balancing out these costs are the benefits of helping
the elderly retain their homes, especially in communities where rapidly
escalating property-tax assessments place a huge burden on owners whose
incomes are fixed or dropping.
Meyer cites “a large body of research literature” that finds
a positive connection between homeownership and the physical and social
well-being of senior Americans.
Relocation to new communities or nursing homes “can create intense
distress for older adults who are forced to leave their longtime homes,”
he concluded.
At the same time, elderly homeowners do not require the same high cost
of services as younger homeowners, especially those with school-age
children. “The amount a family with one or more children pays
in school taxes does not come close to matching the amount it costs
a community to educate even one child.” School districts actually
benefit by retaining elderly homeowners because the savings in education
costs more than offsets any tax relief granted to senior homeowners.
Meyer’s article is titled “The Hidden Benefits of Property
Tax Relief for the Elderly.”
