No Tax Freeze for Seniors

    “Madison should not implement a tax freeze.”

    Describing tax freezes as “unpredictable,” the latest Ad Hoc Committee for Senior and Disabled Property Tax Relief reported to the Board of Selectmen this week. Tax freezes “eventually overwhelm the resources available to fund them” and they are “not in the best interest of Madison’s seniors, the disabled, or the town.”

    The committee has instead recommended amending the present tax abatement program. Under the new recommendation, the town would maintain its present funding cap for tax abatements–0.5 percent of the annual operating budget–and provide a pro-rata distribution to eligible participants. The committee said it believed this method “is a superior idea to a tax freeze.”

    Under the recommended Senior Tax Abatement Allocation (STAA):

• Eligible participants will receive a pro-rata distribution of the entire funding cap, currently set at just over $300,000 (0.5 percent of the operating budget)

• Income qualifications that are in the current abatement program will be maintained (up to $55,737, which is approximately half of the median Madison household income)

• To be eligible participants must have paid real estate taxes in town for 10 years prior to application.

    The committee said its recommendation represents a “more equitable distribution of the town’s budget allocation than any type of tax freeze program.”

    Presently 300 homeowners in Madison qualify for tax abatement. For the present fiscal year, had this program been in effect, each of those homeowners would have received a $1,038 abatement. The committee added, “When combined with state circuit breaker credits, lower income participants would have received up to $2,038.”

    The recommended plan, which essentially divides the tax abatement allocation each year by the number of qualified homeowners, “distributes a meaningful benefit to the largest number of qualified participants.” It is also “much simpler and easier to administer than a tax freeze.”

    This is the second committee named by a Board of Selectmen to study senior tax relief. The first study committee produced an exhaustive review of all tax relief programs, both state and local, and recommended changes to the abatement and deferral programs then in place. Although those changes were made, calls from a number of seniors asking for a senior tax freeze prodded the present selectmen to name this second study group.

    The group completed its own research and talked at length with officials from neighboring Guilford, where a tax freeze had been in place for a number of years. A recent revaluation, however, had required Guilford to allocate additional funds to the program. This is the incident that led the committee to consider tax freezes “unpredictable and extremely expensive.”

    The committee contended tax freezes “are not sustainable because of compounding and revaluations. They create expectations that cannot be met, causing hardships to both participants and town government.”

    Under the present program, the committee said, the current average abatement is $525, however, under the amended plan proposed the average benefit would be $1,038.

    The committee recommended maintenance of the funding cap at 0.5 percent of the operating budget. Other recommendations for change included:

• 10 years of prior real estate property taxes, rather than the present one year, with grandfathered rights for those affected by the change

• No income differential within the program

• A hardship exception to income qualifications

• No grandfathered rights if the program is terminated or modified

• Mandatory periodic review of the program every three years.