New version of
measure ready for Council
Councilman George Smiley pledged unequivocally to bring a
proposed ordinance to significantly cut back the residential
property tax exemption program for seniors and disabled persons
to an up-or-down vote at Council's Oct. 9 session.
The measure will be the same as
the one he withdrew from consideration on Sept. 11 except for
two points. The limit on annual income for seniors, aged 65 or
older, to qualify for the exemption will remain at $50,000, as
provided by current law, and the limit for the disabled will be
raised to $50,000 from the present $40,000.
Like the earlier measure, this
one will reduce the exemption to tax on the first $32,000 of
assessed property value, down from $50,000 at present; require
four years residency in the state, although not necessarily in
the county; and offer only a minimal benefit on properties
assessed at more than $125,000.
If enacted, the ordinance will
affect those who apply for an exemption for the tax year
beginning July 1, 2008, and subsequent years. Those now
receiving an exemption would continue to do so under provisions
of the present law. If they move, however, the present exemption
would not go with them. If they still qualify, they would
receive a benefit in the new amount.
That would have the effect of
'grandfathering' any property owner who was eligible for an
exemption as of last June 1 and either applied by then or takes
advantage of a provision in the law to seek a pro-rated rebate
on a quarterly basis during the present tax year. There is no
late-filing clause in the proposed ordinance. Those who have
become eligible since June 1 or who become eligible before the
June 1, 2008, deadline would be governed by the new law.
Calculated on the present tax
rate, the value of an exemption is now $280.70. It would drop to
$179.65 if Smiley's ordinance is enacted.
The new proposal, like the
withdrawn one, also provides for a proportionately much greater
reduction in the sanitary sewer fee benefit. Instead of being
billed a flat $39 a year, those meeting the same eligibility
standards would pay half of what would be due if calculated by
the regular formula or $50, whichever is more.
conversation with Delaforum and other news media on Sept.
21, Smiley insisted that he has not made an effort to determine
whether he has sufficient support to get the seven votes needed
for the 13-member Council to enact the proposed ordinance. "Some
are [probably] willing to make the decision; some will not. I
can only speak for me," he said. "I hope Council members will
take a very serious look at it."
Since distributing copies of the
new proposal -- with a request that it be "kept in-house" -- on
Sept. 17, he has received responses from two colleagues,
he said. He characterized
those responses as "positive," but did not give other details.
Councilman Penrose Hollins,
Smiley said, asked to remain a cosponsor of the new measure.
Smiley is cochair of Council's finance committee. William Tansey,
the other committee cochair, has not publicly indicated his
views on the measure.
Smiley said he withdrew the
original ordinance after he and other Council members received
an e.mail from the State Disabilities Council, an advisory panel
for the Department of Health & Social Services, objecting to the
disparity between the property-tax benefit offered to seniors
and the one available to the disabled. It also requested that
the eligibility income ceiling be set at 250% of the federal
poverty level. That way it would raise automatically as the cost
of living goes up.
Smiley said he did not accept the
escalator clause because there would not be a corresponding one
on the other side of the ledger to increase county revenue, but
agreed to even the benefit. The disparity has existed since
Council raised the income level for seniors four years ago but
-- apparently inadvertently -- overlooked the one for the
In any event, Smiley said he
wanted to provide additional time for his colleagues to consider
the disabilities panel's views as well as views expressed by
their constituents. He said he would not be swayed by the latter
consideration. "I did not run [for office] the first time to get
elected the second time," he said.
Smiley said he is not satisfied
that the new ordinance "does all I'd like it to do," but added
that he is "willing to take little steps to get the county to
where it needs to be fiscally." He explained that he considers
the alternatives to be "little steps [or] no steps at all."
The county finance department
estimates that the new measure will net county government
between $95,000 and $100,000 in property tax revenue and between
$50,000 and $60,000 in additional sewer fee revenue in fiscal
2009, ratcheting up to between $285,000 and $300,000 and between
$150,000 and $180,000, respectively, in fiscal 2011. Those
estimates are down from between $175,000 and $200,000 in
property tax revenue and between $195,000 and $225,000 in
additional sewer revenue in fiscal 2009, ratcheting up to
between $525,000 and $600,000 and between $195,000 and $225,000,
respectively, in fiscal 2011.
Smiley said he did not approach
the issue as a revenue enhancer but as a matter of equity.
Someone age 25 with two children and a large mortgage could well
be "at more of an economic disadvantage" than a retired senior
with a comfortable pension, he explained. Neither has greater or
less access to police protection, parks, libraries and other
county services than the other.
A tax exemption requires that
those paying the full rate subsidize those who receive the
exemption, he said. Viewed in that light, the exemption is a
government expenditure which Smiley said should be cut just as
other county government spending is being cut.
Michael Strine, the county's
chief financial officer, said the tax exemption program -- both
in its present form and as Smiley is proposing -- is not unlike
similar programs in many other jurisdictions. As long as the
basis -- property assessment -- and the tax rate remain the same
for every taxpayer, the county legislature has the right to
determine who, if anyone, should receive a benefit and what that
benefit should be, he maintained.
He also said that county
officials are in continuing touch with members of the General
Assembly seeking support for some form of assistance to cope
with what the Coons administration has termed a structural
problem in county finances. Also, Strine said, the final set of
recommendations from the taskforce looking into future financing
is nearly completed.