Finance Board Continues Elderly Tax Relief Discussions

By Jan Howard

The Board of Finance is continuing its discussion of tax relief for the elderly, including possible expansion of the current program and a proposed option to that program, a tax deferment program.

Members of the Board of Finance during their meeting Monday discussed both plans, but came to no conclusions. Any changes in the current ordinance for tax relief for the elderly would need the approval of the Legislative Council.

The tax deferral program, if approved, would make it possible for elderly residents who meet certain income guidelines to defer a certain percentage of their taxes until the future when their house would be sold, at which time the deferred taxes, plus interest, would be paid to the town.

One of the goals of tax relief programs, members said, is to keep older residents in their homes as long as possible to avoid their selling to younger people with children.

“Less older people selling to young people with children is a net savings to the town,” member Peter Giarratano said.

While First Selectman Herb Rosenthal agreed the tax relief program does keep older people in their homes in theory, he does not think many elderly people would take advantage of a tax deferral program instead of the current tax relief program because they would consider it as debt.

Member Joe Kearney also raised concerns about income guidelines. “Not all assets show up on tax returns,” he said, noting people applying for the program could have stocks that do not show up. He said any deferment should be based on need. He also noted his concern about the perception of unfairness of tax deferrals for older citizens when younger people are also struggling to pay their taxes.

However, Mr Rosenthal said, “I feel for younger people who are having a hard time making it, but we can’t help them.” While noting he has received phone calls from younger people, state statutes only allow towns to provide tax relief to elderly and disabled residents, veterans, and those involved in emergency services.

He said taxes have gone up since the program was instituted so senior citizens who were experiencing hardships then are probably having the same problems now. “Their taxes went up more than the tax credit,” he said.

Because of revaluation, many have experienced a substantial increase in their home’s value, he said. “There are people who have lived here a long time who are having a difficult time staying here. It’s hit some of them a little harder than others.”

Despite the goal of keeping seniors in their homes, Harry Waterbury noted there are many reasons besides increases in taxes as to why they might not stay in Newtown, such as the cost of living in Connecticut. He questioned if any changes made to tax relief would be enough to keep senior citizens in town.

“How do we keep the tax base down so people don’t leave?” he questioned.

About 500 people in Newtown qualify for the current tax relief program. Some members wondered how many other people would qualify if either income levels were raised or the total amount set aside for the program was raised. The town currently caps the total of elderly tax relief available at about $500,000.

“What would be the impact of changes on a dollars and cents basis?” Mr Giarratano questioned.

Mr Kearney noted there would be a larger pool of recipients if the income levels were raised, though Mr Rosenthal noted there is no way to determine who or how many would apply.