Ridgefield officials debate senior tax relief options
RIDGEFIELD — Torn between an urge to help seniors struggling with tax bills and the costs that senior tax breaks put on other property owners, the selectmen are moving toward a consensus that the fairest way to help seniors would be to expand a program that allows people over 65 — with limited incomes — to remain in their homes but defer paying taxes on them.
The selectmen appear wary of two other tax reduction proposals for seniors that were put forward by John Fisher of the OWLS during last winter’s budget discussions.
One proposal the selectmen have been cool toward is an increase to the $1,048 tax credit senior property owners receive. The other is a “tax freeze” protecting seniors against town property tax increases once they reach age 75.
The tax deferment program the selectmen would like to expand is currently available to senior citizens with incomes of $55,000 or less. The selectmen have spoken of raising the permitted income level to $65,000.
First Selectman Rudy Marconi said Assessor Al Garzi would draft a formal proposal — probably for consideration by the selectmen the second week of January.
Tax credits, freeze
The senior tax credit that Ridgefielders over 65 can now sign up for, reducing their annual tax bills, currently allows a $1,048 reduction to each senior property owner. Fisher of the OWLS had proposed increasing the tax credit to $1,200.
The existing tax credit is enjoyed by 1,675 taxpayers over 65, amounting to more than $1.7 million a year in taxes that aren’t collected — and are made up by younger taxpayers — according to Garzi.
Increasing the tax credit from $1,048 to $1,200, as requested, would cost the town’s other taxpayers an additional $254,600 a year, Garzi projected.
“Raising the tax credit is a big impact, in a year we’re cutting back personnel,” Marconi said.
The proposal to freeze seniors’ taxes, so they don’t have to worry about annual tax increases once they reach age 75, also had the selectmen concerned about costs.
“I think we don’t want to go there,” Marconi said.
Calculations Garzi provided to the board’s previous discussion of the issue back in October showed the town at that point had 949 households with taxpayers over 75, and exempting them from tax increases that run at about 2 percent annually would add about $225,000 a year to what other taxpayers have to pay.
“There’s no question that John Fisher representing the seniors of our community would have liked to have had a tax freeze for those over 75, in their homes,” Marconi said. “But the cost to the general taxpayer would have been into the six figures — it was a couple hundred thousand, which the board felt was too much to absorb at this time, especially given the personnel cutbacks that the Board of Selectmen will be proposing for the 2020 budget cycle.”
The cutbacks include positions eliminated through retirements and layoffs in the course of the current fiscal year, expected to show up in next year’s budget as a reduction of about five and half positions.
“We did the incentivized retirements and, in addition to that, we did two layoffs,” Marconi said.
The selectmen have been more amenable to increasing the income limit for the deferment program — since those taxes, though deferred, are eventually collected.
“I still feel increasing the income is the way to go,” said Selectman Steve Zemo. “It keeps the rest of the citizens whole.”
Raising the cut-off point for participation in the town’s “tax deferment” program for the elderly, as the selectmen would like to do, could also have some short-term costs even though the money is eventually collected when the seniors either sell their homes and move, or pass away and the properties are sold by their heirs.
Given that currently only households with annual incomes of $55,000 or less qualify; there aren’t that many seniors receiving the tax deferments.
“The income level is very low — $55,000,” Garzi said. “Every year, we have some 47 people deferring their entire tax bill … It goes into uncollectable.”
“The people who take advantage of it, need it,” added Marconi.
The total of deferred taxes the town is carrying totals about $2 million, according to Garzi.
With an average Ridgefield tax bill running about $10,000 a year, if someone was on the program for 10 years he or she could accumulate a deferred tax debt of about $100,000.
Raising the income limit from the current $55,000 might bring more senior taxpayers into the program.
The selectmen thought raising the limit so the tax deferments are more widely available would be a way to help more needy seniors.
“It’s a great tool for people to stay in their homes — with a means test,” Marconi said.