Senior tax break finally on its way

KnoxNews.com
April 29, 2007

Legislators have finally begun moving on a measure the state's voters gave overwhelming consent to last November. This is the bill allowing local governments to freeze property tax rates for senior citizens, and it won approval on Monday from the Senate State and Local Government Committee.

Earlier this year, there was concern the lawmakers would not get to it, and if they did, they would be dazzled by the numbers: a fixed ceiling for all of the state's seniors at $50,000 or $60,000 or variances by each county.

The bedazzling numbers also included how much in property taxes each county would have to make up by other means, either raising the local property tax rate to accommodate the senior freeze, implementing a new taxing measure to cover the difference or merely being able to absorb the loss in the annual budget.

In November, 83 percent of the voters approved an amendment to the state's Constitution allowing local governments to implement the tax freeze for seniors - details to be named later. However, later brought a lot of confusion and stalling.

Senate Republican Leader Mark Norris said last month that local government lobbying groups were trying to kill the measure. Local government advocates, like the Tennessee Municipal League, said the proposal raised complex legal questions, and it was better to go slow than to rush in and make serious mistakes.

The central point of contention, though, was the money. According to a compromise worked out last week, the income ceiling will vary from county to county and will be based on the median household income of senior citizens in the respective county.

That seems fair, since there is such a wide variance among the state's 95 counties. Williamson County, near Nashville, is the state's wealthiest, with the median senior income at $52,185. Hancock County, in upper East Tennessee, is at the other extreme with a median senior income of $16,592.

In Knox County, for example, the median senior income is $36,927. Senior citizens earning below that amount would be eligible for the property tax freeze if the County Commission enacts it. Younger taxpayers and seniors who are ineligible for the benefit could face increased property taxes to make up the difference. Knox County officials said the tax rate would have to be about 6 percent higher to raise the same amount of money lost through the tax freeze.

Meanwhile, the bill has a ways to go. At this point, it has passed only one committee, albeit an important one that was willing to work out the economic problem holding the measure back. It must pass more Senate and House committees and the full bodies of those houses before becoming law, but Norris and other supporters are optimistic now that the income dispute has been resolved.

And, once on the statute books, local governments should begin giving serious consideration to enacting their own ordinances. We believe 83 percent of the voters wanted this bill to be enacted not only by the state but also by their local governments. Counties and cities in Tennessee need to find a way to make it work.