Senior Tax Freeze Looks for Warm Reception
Jefferson County Commission is once again facing the question of initiating a Senior Property Tax Freeze. Currently, Jefferson County offers Senior Tax Relief for those that qualify and a little more than 700 residents take advantage of that benefit. The tax relief program is offered by the State of Tennessee and the base contribution toward the recipient’s tax bill is provided by the State of Tennessee. In Jefferson County, Commissioners voted to match the State contribution for qualifying applicants. That program is already in place and is administrated by the Trustee’s office.
Senior Tax Freeze is also at the desecration of the County Commission and it is on the agenda for Monday, November 16, 2015’s voting meeting. Commissioner Robert Tucker will be bringing the item to the floor, in hopes that it will be a complimentary program to the current Senior Tax Relief program. With a base income level slightly higher than the ceiling income for the Senior Tax Relief program, applicants must be over the age of 65 and have an income of $30,800 or less to qualify, as well as other situational stipulations.
While most counties in Tennessee offer the Senior Tax Relief program, only 22 currently offer the Senior Tax Freeze. Questions arose in County Commission Work Session regarding the number of counties that have a tax freeze program and participate in the tax relief program. In conversation with the Trustee’s office in each of the 23 counties that is listed by the Tennessee Comptroller’s Office as having a Senior Tax Freeze, all but one have both the tax freeze and tax relief programs. Though it is listed as having a senior tax freeze, representatives from Hancock County stated that they only participate in the tax relief program.
Of the twenty two counties that do participate in both the Senior Tax Relief and Senior Tax Freeze programs, 12 offered some form of County match for those that qualify for tax relief, in addition to the tax freeze. Nine did not offer any additional match but did participate in both programs and one, Hamblen County, could not provide information on any matching funds provided by the County for the tax relief program but did confirm participation in both the tax freeze and tax relief programs.
Proponents of the Senior Tax Freeze cite the number of seniors that are residents of Jefferson County and the rising cost of health care, medication and food for those individuals that meet the income criteria. Though it is not required that a County put any contributing dollars toward the tax relief program, the state funded benefit is available to all qualifying applicants. The qualifications to participate in the Senior Tax Freeze are much like the one’s for the tax relief program but the income level is higher for participation with Jefferson County’s qualifying numbers for 2015 being $28,690 for tax relief and $30,800 for tax freeze. Proponents contend that the more than $2000 difference in income levels could be significant for some of the area’s seniors and that divvying up the bill of taxes lost because of a senior freeze would be negligible to other tax payers.
Opponents of the County initiating a Senior Tax Freeze are concerned about the cost of administration of the program and the sharing of the lost revenue from frozen property citing the number of economically disadvantaged residents that do not meet the age requirement for a tax freeze. There is also concern that, in a day and time when interest on investments is low, applicants could skirt the system by having little or no income from investments or other sources but still have a healthy bank account. And, questions have arisen regarding the depth of benefit if property tax rates hold stead or near steady in the next several budget seasons.
In reality, there are loopholes in both programs. The State of Tennessee mandates the guidelines for qualification in either the tax relief or tax freeze programs. Neither program addresses an applicant’s bank account or investment balance, only the income derived from investments during the previous tax year. Likewise, in both programs the burden is measured by income, not property value.
As baby boomers continue to age into their senior years, the question of benefits that are geared toward the aging population will likely only grow in numbers. A picture of a silvering Jefferson County was painted by the last census and the push toward recruiting retirees that are attracted to the area because of its livability necessitates that the County prepare for the future and balance today’s needs with tomorrow’s projected demographics.
