Thursday, January 04, 2007

Tasked force...

So, it’s official: a task force will study the last-minute, hyperpolitical senior tax cut passed by four guys who aren’t around anymore and Calvin Ball (the last county council). Though I support some sort of tax relief for overburdened, fixed income seniors, I’m not a fan of this particular cut -- for reasons you can read about here.

The task force is charged with analyzing the tax cut and recommending changes (a good place to start would be an assets test). There’s considerable concern, however, with the time frame the task force is operating under -- they’re set to convene on January 19 and, well, here’s the Examiner’s summary:

The group must make recommendations by Feb. 22, in case the council wants to change the law, passed unanimously in October, which grants a 25 percent tax break to seniors age 70 and older making less than $75,000 a year. The group will have until November to review how many people take advantage of the tax cut and how it has affected the county budget. The group will also “monitor changes to state law that relate to senior tax policy and review similar credits in other Maryland counties,” the resolution states.

So, they have just over a month to recommend changes that could be made before this year’s tax bills go out, after which point repealing or amending the tax code would be akin to raising taxes for seniors, not a good thing, politically speaking.

Does this seem too short a time frame to you, even considering the broader work of the committee which will last until November?

My take is that this is probably the perfect amount of time, and here’s why: Most of the 17 members of this task force will be reasonably well-informed, connected and engaged in the community. Like you and I – people who follow this stuff closely – they’ve known for a while about the tax cut, the task force, the short time frame, all that. Chances are, they’ve already made up their minds.

What’s more, most of the number-crunching (fiscal impact analyses) have been conducted and simply need to be reprinted for members of the task force to glance at as they barrel towards their deadline.

Therefore, a month should be plenty of time to come up with a few recommendations and draft a few pages of text in support of them. The longer a committee serves, I think, the higher the risk of it getting stuck in a quagmire. See, for instance, the rural west preservation committee from last year.

28 comments:

numbers.girl said...

Why why why why why why why why have this tax cut to begin with? What the heck were Merdon/Feaga thinking? And boos to the rest of them for voting in line with them.

If it takes only a month for the task force to recommend rescinding the tax break, then it is plenty of time.

If the task force prefers to wait 6 months before rescinding, that works for me to.

Point being, it shouldn't be supported.

Anonymous said...

With Ball’s task force idea getting a unanimous vote, do Wissing and Keelan still think he is weak and unable to find consensus among his colleagues?

Are they willing to call it a Calvin Ball victory as quickly as they sounded the alarm for defeat?

I doubt it.

Anonymous said...

I agree. They could easily meet an have a majority vote (especially with GASB-45) to bump the income and the credit down in a few hours.

Anonymous said...

Why a need for tax cut for seniors?

Maybe you haven't received your latest tax assessment yet. One day you might understand what limited incomes and increasing taxes means.

Guess what happens when seniors can't afford to live in Howard County? More families come in, need more services and higher taxes. Just this week BRAC families have been given a discount with instate tuition rates.

So ask any senior who just got their assessment how they feel about a tax reduction.

numbers.girl said...

Sure, I'll ask any senior. I'll also ask my neighbor the teacher, my mom the secretary, and my best friend the technical analyst. Guess what- all of them would LOVE a tax reduction. Wouldn't everyone? Does that mean it is justified?

Income-qualified seniors already have the option of a tax deferral.

Giving out tax breaks as a way of keeping out young, breeding people, is plain old discrimination.

EVERYONE feels the sting of rising tax rates. However, income-qualified seniors already have options available to take advantage of their increased equity. They should use it. No additional tax breaks are necessary.

Anonymous said...

Task forces, especially if not truly independent and objective, are sometimes the tools of spineless politicians looking to defray culpability. Further, the timing of this task force could be construed to hurry up and take the political hit now, hoping whatever deed is long forgotten come the next election.

I hope the task force's scope also includes looking at whether the windfall the County is seeing in increased revenues from significantly increased property values is truly needed by the County government. If not, why not? If so, perhaps then all property owners, not just seniors, could see some relief from these increased appraisals.

Anonymous said...

Numbers.

Actually ask a senior. Several seniors. Then report back your findings.

Discrimination?

http://hocomd.wordpress.com/2006/08/15/fox-and-merdon-two-great-ideas-that-can-come-together/

Hayduke said...

Whoops, I forgot a link. From my post:

Though I support some sort of tax relief for overburdened, fixed income seniors, I’m not a fan of this particular cut -- for reasons you can read about here.

And here is the link that I meant to include with the "here" in the above excerpt.

David W. Keelan said...

Numbers, a deferral is not a tax break. It is a tax deferral which requires a lean on the property.

Anon 7:01 PM: Calvin Ball weak. No. He is smart. You take me too seriously.

The task force as it will be convened is a compromise measure. Ball got some of what he wanted and gave in on the others. They split the tasks into two parts. This shows that Calvin is willing to compromise in order to achieve his goals. That is a good thing. I congratulate him for doing so.

I also congratulate the members of the Council who put the compromise forward so that Calvin would have something to show for his efforts rather than nothing to show for his efforts and end up looking weak.

numbers.girl said...

I understand the difference between a tax deferral and tax break, David. If you'll notice, I used the two terms to refer to the two different programs. The deferral is currently in place and is substantial enough. The tax break is the one that was passed in october.

I also understand that the deferral is only a deferral, and will be paid back later. This is plenty. No more needs to be done. If they don't want to use the equity in their home, tough. Pay the tax. The full tax.

Anon 3:12. I don't doubt that seniors would favor a tax cut. Just because it would appease a large percentage of the voting population doesn't make it fiscally sound. I'm also going to ask a bunch of 20 year olds if they'd like free cars, courtesy of the county. I bet they'll say yes. Fiscally sound?

And yes, it is discrimination to say that it is preferable to give seniors a tax break because if they move, young people with kids will move in and cost the county more money. Hey, here's a thought, if those seniors paid their fair share, it wouldn't be an issue.

David W. Keelan said...

Numbers, that is the rub. Many of us believe that Seniors have paid their fair share and continue to pay more than their fair share.

Why should anyone care that these are their homes (not the County's) and it their money (not the County's).

We are not among the crowd that says - take a loan out to pay your taxes (deferral) or move because we don't want you here (that is what it comes down to).

Tom Berkhouse said...

Numbersgirl,

You really DONT understand what you're saying or trying to justify as your position.

Seniors no longer have children in school, and so forth and so on. I choose schools as a primary cost factor since that is probably the largest cost item paid for by the County. Why should they have to pay the same amount as a families who DO have children ? And, people with children get tax breaks simply because they have children. Is that fair to people who DONT have children?

There is NOTHING discriminatory about the tax break for seniors. If a senior citizen has lived in the County for 20, 30, or 40 years, why shouldn't the County take some simple measure that might allow them stay? If the tax break stays, it also doesn't mean that no seniors will ever leave the County.

If you want to talk discrimination and attach that label to tax breaks, then how about if the government eliminates all subsidies (welfare, medicare, mdeicaid, rental vouchers, quotas for hiring, etc.) Like a typical liberal, you're worried about the smaller problem and ignore the bigger problem. You're like a doctor more concerned with a paper cut on a cancer patient. Get some focus and get your priorities straight.

621

numbers.girl said...

Oh, Tom. There you go. I forgot, YOU are the only one who understands the issues.

You are misguided, because, if you understood the legislation, you would see that the tax cut, as it is currently stated, means that the wealthiest of the seniors are getting a tax break. But, as a typical Republican, I can see why you would like this. Let's reward the rich. Very typical of people like you.

The cut is aimed at those who own their homes and who likely don't have a mortgage. The $75k income qualification is a joke. This isn’t low income to elderly seniors who own a home. The real property tax is probably the only housing cost they’ll encounter in a year.

Additionally, since the target population has been in their homes 20-30 years, they got in to Howard County before the huge real estate boom, which equates to a very large amount of equity in their home.

Again, you may not understand the legislation. A copy can be found on the County website, if you’d like to read.

Anonymous said...

Just a thought here, but what if a group of septegenarians all lived next to an elementary school? Should they get a tax break, even though the county has to spend more money to bus the kids to the school? Could this be construed as giving a tax break to someone who adds cost to the county? Should the cost of obese children be factored in, because they ride a bus rather than walk to school? Shouldn't, in this instance, the owners of these houses (regardless of age) pay the regular tax rate?

wordbones said...

numbersgirl,

It is always easy and popular to bring out the old "tax cut for the rich" line. What is seldom mentioned is that it is the rich who pay the most taxes to begin with.

-wb

Anonymous said...

It's a rare, rare, rare day that I find myself on the same side of an issue as Mr. Keelan, but his 9:20 comment rings sound.

"The real property tax is probably the only housing cost they’ll encounter in a year"

Not true. Seniors will also pay:
- if living in Columbia, CA lien,
- if living in a development anywhere in the County with homeowner association fees, those fees,
- higher than average home maintenance costs because their homes are older, and
- higher than average per capita utility costs because their homes have less efficient heating/cooling systems, less effective wall and roof insulation, and doors and windows that are less insulative and leakier.

Did County government operating costs really go up at the same rate that property values did? If not, why do property taxes need to just automatically rise with property values?

There were property tax rate hikes in recent years to adjust revenues to meet needs. Shouldn't similar downward rate adjustments occur in this environment of dramatically appreciated property values?

If that question isn't discussed by the task force's report, then it sure seems like the County government is exploiting the opportunity when increased revenues from increased property values occur, exploiting at the expense of all taxpayers. For some seniors on fixed incomes, that exploitation is tantamount to unnecessarily squeezing them out of their homes. Emininent domain just under another guise.

David W. Keelan said...

Let me ask everyone a question just to see if we are all at least starting from the same point.

Are we all aware that property assessments have gone up from 72% to 150& depending upon where you live in the county? Are you also aware that these will be phased in over a number of years (take 72% and divide by 5% = the number of years it will be phased in) and while they are being phased in the property will be reassessed in three year increments ensuring increased assessment values?

We will not get any relief here - no one. However, most of us are earning income and earn more every year. Seniors don't have that kind of earning power. They are stuck.

Tom Berkhouse said...

Numbersgirl,

You may have read the legislation too, but it's your misplaced statements that I'm addressing.

Why is it that you feel compelled to tax them simply because they might make more money than you or someone else? Or because they no longer have a mortgage?

Wordbones is right - why is everything a "tax cut for the rich"? Don't "rich" people pay higher percentage of their income from the start? Is that fair? Maybe these "tax breaks for the rich" merely get them down to the same (or roughly the same) percentage as the people in lower income brackets?

Wouldn't the fairest system be a flat tax?

Numbersgirl - do you feel it right to "redistribute wealth" so that everyone makes the same? That's essentially what you're advocating. Where would that stop? Should everyone have the same size house, or same car, or same clothes? I hope your answer is no.

wordbones said...

Mr. Berkhouse,

This time we are in agreement. I'm a big fan of a flat tax.

-wb

David W. Keelan said...

Steve Forbes for President.

wordbones said...

Single issue candidates rarely win.
-wb

David W. Keelan said...

wb, I was just kidding. Given the flat tax comments I thought it was appropriate. dk

Tom Berkhouse said...

Yes, wordbones, I do support a flat tax. And, I also think that corporate tax breaks (corporate welfare if you will) should be seriously curtailed. We commoners can't get tax breaks when billions of dollars are being doled out to businesses. I'm not saying to end all tax breaks for business - I know that there needs to be some stimulation for economic benefit, but it needs to be reduced tremendously.

Anonymous said...

A comment on something less taxing. The Western Howard Co. Democrat Club will Meet this Thursday, 1/11/07, 7:00 p.m.,at the George Howard Building.

David W. keelan said...

Numbers, going back and looking at your comments. I don't think that Seniors will be able to take advantage of any other tax breaks as you seem to believe.

Additionally, for those of you who believe we are treating seniors differently please consider the numerous property tax breaks available across the board relative to assessed values.

Planned Development Land
Solar Heating and Cooling systems in a residence
Erostion and sediment control devices
Home Improvements under $100,000
Unsold rehab housing
Special Taxing Districts
Government, educational or religious property
Blind homeowners and surviving spouces
Community Associations,
disabled veterans and their
surviving spouses,
surviving spouse of military casualties,
fraternal or benevolent or educational
facilities, and charitable facilities.
Cemetaries
Cesapeake Bay Foundation
Senior Continuing Care Facilities
Volunteer Fire Companies
Gunpowder Youth Camps, Inc

That is just scratching the surface. In all State law provides out right exemptions for about 200 conditions.

Numbers, repeal those and I think you can persuade me to your line of thought.

David W. Keelan said...

That should read "40 conditions" not "200 conditions" pardon the error.

FreeMarket said...

David- you’re making an argument that any mother could refute. “But mom, everybody else is getting property tax breaks, why can’t seniors?”

David W. Keelan said...

You are absolutely correct Freemarket. That is a very very poor arguement. However, that isn't my point and it is not my arguement. I was trying to by ironic.

The arguement has been raised here, on my blog (not by me), and other blogs that this is a special interest tax break. The arguement is that we should have something more broad based or more targeted (yes both arguements exist).

My point is that targeted tax breaks are nothing new. Why cry foul now? Why cry foul when the county will be culmatively coming into $132M in addtional Property Tax revenue in Y08,09,10 over 07? Why is no one crying foul about that? We can't afford a $12M tax break for our seniors?

Lets not mention the Constant Yield Tax Rate yet!

If people want to discuss our over all property tax policy and address that issue great. Lets talk.