Tax relief sought for poor, elderly

County commissioners are concerned that a recent tax increase will hurt older residents on fixed incomes.

By Kathleen Baydala Staff Writer, Chattanooga Times Free Press
Sept 12, 2005

Following the recent 26 cent property tax increase, Hamilton County commissioners are seeking support from state lawmakers for a tax relief program for elderly or disabled residents living on fixed incomes.

"In Hamilton County, we’ve only got but one major tax levy, and that is property tax," Commission Chairman Larry Henry said. "The elderly, those on fixed incomes, can’t keep being taxed up the roof."

State law allows counties to exempt some poor, elderly taxpayers from tax increases. State government reimburses counties for the revenue they lose.

But Mr. Henry and Commissioner Lou Miller said the law does not provide adequate relief for the county. Only a very narrow section of the elderly population qualifies because the criteria to be exempt only apply to the poorest, they said.

A state constitutional amendment idling in the Tennessee General Assembly would allow counties to develop more extensive tax relief programs, said state Sen. David Fowler, R-Signal Mountain. However, counties would not be reimbursed by the state for revenue losses incurred as a result.

"I do think it would be beneficial, and I would certainly support it," Sen. Fowler said.

Both the House and the Senate unanimously passed the constitutional amendment proposed by Sen. Mark Norris, R-Collierville,   R - Collierville RCollierville, in 2004. They must approve the measure again next year by a two-thirds majority vote. If the amendment passes, it would be placed on the ballot for the 2006 elections.

Sen. Fowler said he believes there is enough support among lawmakers for the amendment to pass again. And if the amendment is approved by voters, Hamilton County could set up a tax relief program by 2007, he said.

However, a head lobbyist for county governments raised some concerns about the measure.

Doug Goddard, executive director of the Tennessee County Commissioners Association, said the state legislature — not county governments — would set the rules of the tax relief program. That means that state government would decide how old homeowners must be to qualify for the relief, as well as how much income they can have and how much their home can be worth.

So far, state lawmakers have not set income or home value caps — just an age minimum, Mr. Goddard said. Potentially, such a great number of older homeowners could take advantage of the tax exemption that it would cost counties thousands and thousands of dollars, he said.

"We have well-heeled people who meet the age level but who don’t need a tax break," Mr. Goddard said.
Hamilton County Finance Director Louis Wright said his office has no estimates on how the amendment would affect local revenue.

"I assume that it would decrease revenue collections," he said. "But by how much? I would need to know how many citizens it would affect."

Instead of supporting the amendment, counties should set aside money in their budgets to give rebates to poor, elderly taxpayers, Mr. Goddard said.

John Reddan, a 66-year-old North Chattanooga resident, said he supports a more extensive tax relief program even though he is not living on a fixed income. The value of his home on Avalon Place nearly doubled this year after the countywide property reappraisal and tax increase, he said.

"All" All I want to do is live here as I am sure other senior citizens want to do," Mr. Reddan said.

E-mail Kathleen Baydala at kbaydala@timesfreepress.com  TAX RELIEF The Hamilton County Property Tax Relief Program applies to: Elderly Minimum age of 65 Combined income cannot exceed $12,710 Disabled Must be totally and permanently disabled as rated by the Social Security Administration or other qualified agency Combined income cannot exceed $12,710 Source: Hamilton County Trustee’s Office