Athens-Clarke Mayor Nancy Denson introduced a proposal Tuesday to give senior homeowners a break on their taxes, a key campaign promise in 2010.
Faced with projections of $10 million in budget cuts or tax increases over the next four years just to maintain current services, though, commissioners gave the plan a lukewarm reception.
“We’re in an environment where we’re looking at chopping all sorts of things out of the budget,” Commissioner Andy Herod said.
Denson wants to let seniors freeze their homes’ tax values when they turn 65 so their taxes don’t rise with higher assessments. The Clarke County School District instituted a similar policy, known as a floating homestead exemption, in 2002.
About 5,000 homeowners are eligible for the floating homestead exemption on school taxes — a third of the owner-occupied households in Clarke County — and about 3,000 have taken advantage of it, county Tax Commissioner Mitch Schrader said.
If Athens-Clarke County had a floating homestead exemption for seniors and home values grew by 1 percent, government revenue would grow by $4.4 million in 10 years, Schrader said. But that’s $500,000 less revenue than it would collect without the exemption, he said, the equivalent of a $7 tax hike every year on the average under-65 homeowner. Those figures do not account for the growing number of retirees in Athens.
Commissioner Alice Kinman worried that the exemption for seniors would mean others would pay more.
The floating exemption would save the average senior homeowner only $9 per year at the current tax rate, Commissioner Jared Bailey said.
“It really doesn’t seem to hardly be worth it, to me,” he said.
Some commissioners also questioned why wealthy retirees should get a break along with poor ones who might struggle to pay their tax bills. When the commission explored the idea of tying property taxes to income last year, though, they couldn’t find a good way to do it.
“You’d almost have to have an auditing arm of the tax office,” said Denson, who was tax commissioner for 25 years before becoming mayor.
Others questioned whether seniors are really being taxed out of their homes. Denson said she has heard many complaints from seniors but could recall only one retiree who was forced to move because of her tax bill.
“We typically work out payment plans with those individuals,” Schrader said.
Commissioner Kathy Hoard, whose husband recently died, said she is considering moving because her taxes, gas bill, power bill and other expenses are all the same even though she only has one income now.
“I can speak from experience that there are a lot of factors on why you’d want to leave a home,” Hoard said.
Denson said she plans to call for a commission vote in November. If the exemption passed, it would go before voters next November and, if they approve, take effect in 2013.