Beginning with the next application period, local seniors applying for town tax relief will likely be asked to sign an asset affidavit. The decision was made following a brief question-and-answer session with Tax Collector Carol Mahoney and Finance Director Robert Tait during the Board of Finance meeting November 25.
The issue of gaining more clarity regarding applicants’ assets first came up during public discussion last February when finance board Vice Chairman Joseph Kearney asked the town to consider requesting applicants to sign an affidavit promising they are not holding assets that would otherwise be hidden from officials verifying income from candidates’ tax returns.
During this week’s meeting, Mr Kearney said the generous town senior tax relief program is not an entitlement. He said it is unfair to tax those in worse financial shape who don't qualify for tax relief - to subsidize those with unreported assets.
“There could be people who own their own home, and who have other non-income-producing assets who qualify for the benefit based (solely)on their income,” Mr Kearney said. “I’m sure most people need the assistance. But if even ten percent dropped off, there would be more money for others.”
Ms Mahoney said she does not have a problem asking applicants to sign an asset affidavit, but said requiring an asset verification process would put a strain on her staff, which is already administering tax relief benefits for more than 700 eligible residents.
Mr Tait said the town would have to create its own parameters when it came to qualifying the assets that would be required to be included in the document language.
Ms Mahoney also told the finance board that in a canvass of her colleagues around the state, Newtown appears to be among a very small number of communities offering the extent of tax relief available.
“Most of the other assessors and tax officials I talked with were amazed at how much Newtown allows on the senior tax program, and how much money we allow — $2,525 is a lot of money [for the highest tiered benefit],” she said. “Newtown is very generous. And the residents who receive the benefit are very appreciative.”
Mr Tait said he could bring a sample affidavit in to the finance board to review by the board’s next meeting.
The finance director also reviewed additional information he developed in analyzing the current senior population, including those who currently qualify for the local benefit. He combined assessors and registrars databases to calculate some of the latest information presented to the board on the local senior demographics.
A prior report Mr Tait generated on the senior tax relief program revealed that 740 senior households receive credit or an assessment exemption toward their real estate tax. This represents about 25 percent of the total senior voting population in town.
The town counts about 2,394 households with 3,745 voting seniors age 65 and over among its population. About 420 households of one or more seniors qualify for the highest allowance based on incomes ranging from zero dollars to an annual household income of $45,000.
Another 150 households earning between $45,001 and $55,000 qualify for a second-tier benefit, with about 120 with incomes between $55,001 and $65,000 qualifying for a nominal benefit.
In addition, about 50 residents, primarily mobile home owners, qualify for an $850 tax credit on their dwelling.
According to Mr Tait, the average participating senior household receives a 39 percent discount on their tax bill because of the relief program. And after the credit is applied, he told the finance board the average senior property tax bill this year was $3,885.
He said this accounts for 31 percent of all senior households receiving a tax credit. In examining the demographic and property records, Mr Tait determined that 75 senior-owned homes are assessed at more than $500,000; and there are six assessed at over $1 million.
The average senior assessment went from $331,331 in 2012, down to $245,079 after the latest revaluation, with the median senior assessment dropping from $307,960 to $219,220.
Discussing the asset affidavit during the February 11 finance meeting, Mr Kearney suggested that applicants should not have more than $250,000 in assets in addition to their primary Newtown residence.
“Under the [tax relief] program now, an applicant could have a second or vacation home that is fully paid for,” Mr Kearney said, "and that wouldn’t show up on the tax return review. Or they could own equities that do not pay dividends.”