Concerns abound over details of state tax freeze for seniors

By RICHARD LOCKER, KnoxNews.com
December 14, 2006

NASHVILLE - It looked so simple on the Nov. 7 ballot: the state constitutional amendment allowing local governments to freeze property taxes for homeowners 65 and older.

Voters approved the amendment 83 percent to 17 percent.

But representatives of city and county governments were full of concerns when they met with the amendment's sponsor, Sen. Mark Norris, R-Collierville, here Wednesday.

What will the income ceiling be for eligibility? Should the ceiling be uniform statewide or should each city and county that opts into the tax freeze be allowed to set its own ceiling? Who will administer the program? What are the costs? Won't a tax freeze for seniors drive up taxes on everybody else?

Norris listened to the 15 or so local government representatives and assured them he'll work out concerns in the bill the General Assembly will have to approve - setting out details of the program - before any city or county can adopt a freeze.

But he also warned that he doesn't want roadblocks thrown up against its implementation.

"Your input is important in this mandate by the voters. There is some confusion, but people are anxious to get on with this," Norris said.

He called the meeting to begin laying the groundwork for the legislation to implement the tax freeze. No decisions were made.

The amendment provides that cities and counties may adopt local ordinances to freeze the property tax bills of homeowners 65 and older whose income or wealth falls under a ceiling to be set by the state Legislature. The taxes can be adjusted up if physical improvements to the property increase its value.

Norris has filed a bill for the legislative session that opens next month with a $50,000 annual household-income ceiling for eligibility. Sen. Doug Jackson, D-Dickson, has filed one with a $60,000 ceiling.

Doug Goddard of the Tennessee County Commissioners Association, and others, argued for a lower ceiling because the financial impact on local tax bases rises as more middle-income homeowners are added.

Goddard said that using 2000 census data, between 64 percent (in Williamson County) and 94 percent (in Union County) of senior homeowners would be eligible under a $50,000 limit, depending on which county they live in. He said his group's lawyers believe the amendment requires a uniform statewide income limit for participation.

Norris disagreed, saying that local governments will be able to set lower limits, up to the maximum set by the Legislature.