seniors' tax exemptions
to significantly restrict eligibility for county tax breaks for
seniors and disabled persons and cut the benefits of the
exemption program is being prepared for introduction when County
Council returns from its summer recess.
George Smiley, chairman of
Council's finance committee, said the proposed ordinance he is
going to sponsor will apply to newcomers to the county and those
now in the program who move to new residences.
"No one is going to see their
taxes raised as a result of this ordinance," he said. "It
doesn't take any benefit away from those who already have it."
It also does not affect seniors'
benefits applicable to school districts' property tax which,
although collected concurrently with the county tax, is a
Chief financial officer Michael
Strine, who helped draft the measure, said he has 'briefed'
County Executive Christopher Coons on its provisions. Coons,
Strine said, "wants to wait until he sees the [final proposed]
legislation" before taking a position on it.
As it now stands, the proposed
ordinance would exempt the first $32,000 of a residential
property's assessed value from the property tax for a single
owner who is older than 65 or disabled and has annual income of
$15,000 or less. Married couples who own their property jointly
and have combined income of $19,000 or less would be eligible
for the same benefit if either of them is over 65 or disabled.
Proceeds from Social Security are not included in the
Presently, the first $50,000 of
assessed value is exempt for owners over 65 with incomes, single
or joint, of $50,000 or less. The exemption and income limit for
disabled persons are $40,000. There is now an additional
exemption of $42,000 for someone who has lost the use of arms or
legs and $82,000 for loss of both. The $42,000 exemption would
remain under the new ordinance, but the combined exemption would
be lowered to $74,000.
The proposed ordinance would
exempt the first $5,000 of assessed value of any residential
property assessed for more than $125,000 if income of the owner
or spouse is less than $3,000. There is no limit on a property's
value in the present law.
It is now possible for owners who
meet age, physical and income qualifications before the June 1
application deadline but do not apply to obtain pro rata tax
abatements on a quarterly basis. There is no such provision in
the proposed ordinance.
seniors and the disables now pay a flat $36 annual fee for
sanitary-sewer service irrespective of the amount of water they
use. The proposed ordinance calls for them to pay half of
the total charge computed on usage or $50, whichever is more.
Smiley said he also is
considering a provision which would require an otherwise
eligible property owner to have lived in New Castle County for
three years before becoming eligible for the exemption program.
Smiley said the proposed
ordinance is still a proverbial 'work in progress', but he
expects to have it ready for introduction when Council next
meets, on Aug. 28. Under Council rules it could be enacted as
soon as Sept. 11. However, it would seem more likely that
discussion will extend beyond then. There is no rush because the
deadline for inclusion in the program this tax year, which began
on July 1, is past and the deadline for next year, when the
measure would become effective is June 1, 2008.
He said he has begun circulating
the proposed ordinance in draft form among his colleagues, but
has not yet gotten any reactions. "I have no idea what lies in
store for this legislation," he said.
He said he took the unusual step
of making his present intentions public after a fellow
councilman, Robert Weiner, 'leaked' the information in an e.mail
to some of Weiner's constituents. "I wanted to hold off on any
rumors getting around and prevent a panic," Smiley said.
Smiley said he opted against
simply seeking repeal of the present program and substitution of
a new one because he felt that would be unfair to those now
enjoying benefits. Passage of the proposed ordinance would
ultimately result in phasing out the present program as those
participating in it die and move.
Strine said there currently are
18,638 senior exemptions and 1,444 disability exemptions out of
a total 199,600 residential properties in the county. They
'cost' county government $13.5 million in revenue not received.
Smiley said he expects the
changes to net about $225,000 during the first year "and double
each year after that" as larger numbers of people reach age 65
and move into the county.
Doing away with the exemption
program had been proposed earlier by some members of the
county's financial future taskforce. The taskforce as a whole
recommended significantly modifying it.
Smiley said making the tax break
available to the elderly with generous income limits had the
effect of discriminating against young couples raising children
on lower incomes. "In some ways, they're the ones who need
help," he said.
On the other hand, those now
benefiting from the program are receiving public safety,
libraries, parks and other county-provided services on the same
basis as everyone else, he added.
Acknowledging that the appearance
of targeting seniors and the disabled could be politically
risky, he said he and other Council members have responsibility
to deal with county government's problematic financial
"I refuse to play politics with
[my] office," he said. "I do what I think is the responsible
thing for residents of this county and their government."
Soon after taking office in late
2004 Smiley, whose district was created in the expansion of
Council from seven to 13 members, joined other members in
voting to raise the exemption and income ceiling from $40,000 to
$50,000. He said he considers that vote to have been
"That was waiting for us when we
came in ... before we got a clear picture of what the financial
position of the county really was," he said.