The Representative Town Meeting has resoundingly approved a set of changes to the town's senior tax-relief programs that will tighten eligibility requirements.
Assessor Paul Friia proposed the changes, which the legislative body approved Tuesday night, constituting the first modifications to the town's senior tax-relief programs since 2006.
In the most significant change, applicants' losses in ventures such as business, real estate or capital markets will no longer be factored into their qualifying income for the town's senior tax abatement and tax-deferral programs.
"Through observations during the application process, there has been a growing sense in the Assessor's Office that certain clarifications and a redefining of income requirements were needed," Friia wrote in an Oct. 11 response to an RTM Ordinance Committee questionnaire. "The new income requirements would strengthen the program by reducing the number of current recipients and allowing the focus to be properly on the residents who have limited incomes."
Excluding losses from applicants' qualifying incomes would put Westport in line with several neighboring municipalities that set income parameters for their senior tax-relief programs, according to Friia. Fairfield, Greenwich, Norwalk, Stamford, New Canaan and Darien all treat senior tax-relief applicants' losses as zero, according to a survey conducted by the Westport Assessor's Office.
Tightening the qualifying income requirements for senior tax relief will save the town $75,000 annually, according to an Oct. 22 memo by the RTM Ordinance Committee.
During the current fiscal year, the town will distribute senior tax abatements worth a total of about $1.1 million and senior tax deferrals worth about $1.45 million. The total value of those tax relief initiatives accounts for about 1 percent of the town's current-year budget.
During the last fiscal year, about 470 Westport residents 65 years old and over received property tax credits and/or tax deferrals from the town. Approximately 4,200 Westport residents are 65 years old and over, according to 2010 U.S. Census Bureau statistics. Based on that number, Westport seniors receiving tax relief during the last five years comprised about 10 percent of the town's 65-and-older population.
RTM members' discussion Tuesday of the changes centered on a proposed condition that would eliminate tax abatements for senior town residents whose homes exceed $2 million in market value. That prospective regulation was added to the other revisions proposed by Friia, after Board of Finance members last August endorsed the $2 million cap for tax-credit recipients. But the proposed $2 million limit received a less enthusiastic response from most RTM members.
"The idea of using a property value is actually really arbitrary and capricious because it kind of flies in the face of the homeowner," said Catherine Calise, District 2. "Somebody that can qualify for income would be disqualified because their property value is at that cap."
But some RTM members argued that the $2 million cap would be more equitable for town residents in less highly appraised homes.
"It just seems to me we're asking someone in a lower-value home -- it could be $600,000 -- to pretty much take money out of their pocket to subsidize someone in a house that's twice the median value of a home in Westport," said Allen Bomes, District 7.
Six senior tax-relief recipients during the last fiscal year lived in homes worth more than $2 million, according to Friia.
The RTM subsequently approved, by a 21-5 vote, a motion by Calise to strike the suggested $2 million home-value limit from consideration. Shortly after, the legislative body voted, 23-2, with one abstention, to approve the other changes proposed by Friia.
A range of sources -- including Social Security payments, military disability benefits, inheritances and gifts, as well as food stamps -- will still be excluded from senior tax-relief qualifying income requirements.
The town offers annual tax credits between $1,000 and $3,500 for senior and disabled applicants with annual incomes less than $55,000. Seniors with annual income less than $75,000 can defer 100 percent of their annual property taxes, while recipients who earn between $75,000 and $100,000 annually can defer payment of their annual tax increases.
In recent years, tax-deferral recipients have paid between 3 and 5 percent annual simple interest on their deferred taxes, according to a rate calculated by the town's Finance Department. For the current fiscal year, the Finance Department set a 3 percent interest rate for senior tax deferrals.
The senior tax-relief program changes approved by the RTM will go into effect during the next fiscal year.
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