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Questions stall action on senior tax relief As state officials work out a plan to freeze property taxes for elderly homeowners, some local county officials are warning they won't approve the break locally if the income limit is too high. Setting a cap as high as $50,000 could result in the county losing hundreds of thousands of dollars and could therefore reduce the likelihood that the County Commission approves the plan locally, some commissioners said. "We wouldn't approve it. We couldn't afford to," said Commissioner Curtis Adams, who has supported a tax freeze but thinks it should be available to those with incomes of about $20,000 or less. House Speaker Jimmy Naifeh, D-Covington, raised the possibility that the Tennessee General Assembly may create a committee to study the issue over the summer. He noted that while voters overwhelmingly endorsed the tax freeze in November, questions about implementation and an income cap are unanswered. "Hopefully we can finish this work during this session," he told local officials gathered in Nashville last week for County Government Day. "But if we are not able to come up with what we should on this, Lieutenant Governor (Ron) Ramsey and I will probably appoint an ad hoc committee to study this over the interim period so we can have something ready for next year." That's what Hamilton County Trustee Carl Levi said he expected would happen. "I hope they do that because if they study it over the summer, they'll get it nailed down properly," Mr. Levi said. He said he supports the tax freeze, but that there are plenty of lingering questions about several issues, including an income limit. "If they set it at $50,000 or $60,000, it will bankrupt some of the smaller counties," Mr. Levi said. Lt. Gov. Ramsey, R-Blountville, was more optimistic a bill would be passed this year. He said Senate Republican Leader Mark Norris, R-Collierville, has worked with Doug Goddard, executive director of the Tennessee County Commissioners Association, to resolve outstanding issues, and that Mr. Goddard supported implementing a cap based on median income for each county. Figures from the State Comptroller's office estimate that using median income as a cap would cost Hamilton County $53,064 in revenue for each penny in new residential property taxes levied. In other words, the county's 26 cent tax increase approved in 2005 would have to be 28.2 cents to generate the same revenue. The county's property tax rate is $2.894 per $100 of a home's assessed value. Setting the income limit at $20,000, as many local officials want, would cost the county $32,388 on each new cent of property tax. Setting the limit at $50,000, as has been proposed, would cost $62,191 on each new cent of property tax. Lt. Gov. Ramsey said there also are discussions about a residency requirement, so that the relief would be geared toward those homeowners who have lived in the same house "forever" only to see nearby development send their appraisals and property taxes "out of sight." The proposal could require homeowners to have lived in the home for five to 10 years, he said. Rep. Naifeh has expressed irritation that Mr. Goddard and Republican Senate leaders have not included House sponsors in their discussions. Hamilton County Commissioner Richard Casavant said he worried that too high an income limit would shift the tax burden to people such as "a single parent struggling to own their own home." Mr. Goddard and David Connor, a lawyer for the University of Tennessee's County Technical Assistance Service, spelled out a list of other questions about implementation of the tax freeze at a presentation to trustees and county commissioners from across the state last week. Leaving loopholes or uncertain enforcement will create a situation resembling TennCare, which some people received fraudulently, Mr. Connor said. "If we don't do this well, everybody is going to know someone who has had their property taxes frozen that doesn't deserve it," Mr. Connor said. |
