Editorial 4/12: Seniors deserve overdue tax break

April 12, 2004

The Commercial Appeal

WHILE TAX relief for economic development has become almost routine in Tennessee, the impact of property tax increases has been devastating for low- and moderate-income retirees.

New jobs are important to the state, but it also makes sense for economic and humanitarian reasons to freeze taxes for senior citizens who can't afford to bear this ever-increasing burden.

This week considerable progress could be made on that front by speedy approval in the state Senate of a bill sponsored by Sen. Mark Norris, R-Collierville. The legislation calls for a constitutional amendment that would enable taxing authorities to freeze property taxes for property owners 65 years old or more who meet maximum income guidelines.

The bill needs a simple majority approval by both chambers of the General Assembly this year and approval by two-thirds majorities next year. Voters would decide the issue in the 2006 election.

There seems little doubt that Tennessee voters would approve the measure, which would mean a lot more to cash-strapped retirees than it would to the amount of tax revenue collected by governments across Tennessee.

As Norris argued in a Viewpoint guest column earlier this year, "(M)any older residents feel punished for a lifetime of fiscal responsibility" and need help.

Either through increases in the tax rate or reassessment of their property or both, retirees have been forced into difficult choices as their property tax bills have skyrocketed in recent years.

In some cases, they've been forced to sell out or abandon their homes, speeding neighborhood deterioration that contributes to the erosion of the tax base. In some cases, Norris pointed out, seniors have been forced to choose between paying for prescriptions or paying property
tax bills.

If the amendment passes, income qualifications would be set by the legislature and adjusted annually to the latest inflation figures without requiring another constitutional amendment.

If local taxing authorities exercised the option, homeowners age 65 and older would be allowed to apply for homestead exemptions, which would freeze the property owner's tax bill as long as he or she remained eligible.

The General Assembly attempted to legislate homestead exemptions in 1979, but the law was declared unconstitutional because the state constitution prohibits age- or income-based distinctions among taxpayers.

The legislature later attempted to deal with the problem by authorizing tax deferments for qualifying seniors. That allowed some retirees to defer payment of that portion of their tax bills that resulted from tax increases until the property was sold or the property owner died. Few have taken advantage of the program, apparently concerned about leaving property
encumbered by a large tax bill or worried that the deferment might be seen as a "loan."

A number of states, however, have had better success with the less cumbersome homestead exemption. Tennessee should join them. At the least, citizens should be given the opportunity to vote on the issue. This is one area in which moderate- and low-income seniors clearly deserve a break.