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I h l’ropertv—tax—cap.
JAN 2010
Property tax cap for
seniors puts some
Dallas-Fort Worth cities in
a bind
0
Theodore Kill? / The Dallas MorningNews [email protected]
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Six years after Texas voters gave cities
the ability to cap property tax bills for
senior citizens, cash-strapped
cornnmnities that opted in are starting
to feel the costs.
Cities stand to forfeit billions of dollars
in values from their property tax rolls
2 62017 11:40AM
Property
La
cap for seniors puts some Da1Is-Fort \‘oflh
Cities
in a
...
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this year because of the caps even as many municipalities face their worst
budget deficits in years.
Those losses are projected to grow sharply as property values climb and waves
of aging baby boomers become eligible.
The permanent local-option caps, which voters added to the state constitution
in 2003, apply to residents age 65 and older. At least 244 cities have adopted
the municipal tax caps since 2004, according to the state comptroller.
“All of these cities, they are going to cause themselves imminent trouble in the
future,” said Dick Lavine, a senior fiscal analyst for the nonpartisan Center for
Public Policy Priorities in Austin. ‘That’s all property value thats no longer
able to support schools, fire, police, roads and sewers.’
Figuring out how much taxable value the caps have wiped off the books is
difficult. Neither the state nor local appraisal districts keep reliable data about
the losses.
Clearly, the numbers reach into the billions. By comparison, school districts,
which operate under mandatory senior citizen tax caps, forfeited an estimated
$47 billion in taxable value in 2008.
In Collin County, tax data shows, the municipal caps erased more than $200
million in value from the books of nine communities last year.
That figure does not include an optional tax cap for seniors on county
property taxes, which expunged an additional $560.9 million, the analysis
showed. More than 100 counties, including Dallas and Tarrant, have passed
26 2Q17 11:40 AM
Property tax cap for seniors puts sonic Dallas-Fort Worth cities in a ...
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optional senior tax caps. The city of Dallas has not.
All of that lost taxable value translates into millions of dollars in revenue for
local government more than $2.4 million this fiscal year in Collin County and
-
its cities. And it puts greater pressure on leaders in those communities to
slash services or raise property tax rates for nonseniors.
Easing the burden
Providing tax relief for the elderly became a political hot potato after a real
estate bubble in the 1970s that, for many, drove up property tax bills to
unreasonable levels.
Texas and other states have since eased the burden on older fixed-income
homeowners with homestead and other exemptions.
The senior tax caps, written by state Rep. Fred Brown, R-Bryan, are meant to
provide further relief. The proposal received overwhelming support from
lawmakers and voters.
Once eligible, a residents tax bill becomes frozen at its current amount.
Disabled residents also qualify, although their impact on local budgets is far
less.
The thinking is that the cap’s budgetary impact will always be limited becaLise
even as more seniors qualify, others will move or die. When that happens, the
full value of those properties returns to the tax rolls. Widowed spouses age 55
and older continue receiving the benefit.
262017 11:40AM
Propcrty tn cap for seniors puts some Dallas-Fort Worth cities in a
...
http://wnv.dallasnews.corn’news’texasi2O IC Oil! 7’Propcrty-tax-cap.
Oscar Garcia, a 77-year-old Fort Worth retiree who has actively campaigned
for the senior caps, said the measure is crucial to struggling older
homeowners.
“This applies to people who have been paying their fair share of taxes all of
their lives,” Garcia said. “Its not unfair to pass the burden to the next
generation. That’s the way it’s always been in life.
But with property values certain to rise in the long term and the senior
population far outpacing overall growth in Texas, the tax caps could one day
become a ball and chain on municipal budgets.
The state’s elderly population, about 2.4 million, is expected to double by
2030, according to estimates from the census and state demographer. Texas’
total population, 24 million, is projected to grow far more gradually.
Plano’s problem
Perhaps no city illustrates the predicament better than budget-challenged
Plano, which capped senior citizen tax bills in 2004.
Even as Plano struggles with budget deficits, the city is expected to forfeit
more than $765,000 in revenue this year because of the senior cap. The losses
have risen sixfold since 2005, driven largely by growth in the city’s elderly
population.
The forfeited amount is relatively small given Plano’s general fund budget of
about $220 million. But the losses have exacerbated the city’s financial
problems and will only grow.
262017 11:40AM
Property tax cap lbr seniors puts some Dallas-Fort Worth cities in a
...
http:”wnv.dallasnews.convnews’texas’2OlOOl/I7/Propenv-Lax-cap.
The cap also has blunted Piano’s ability to raise money through property tax
rate increases.
Piano has twice raised its tax rate since 2006. But because of the city’s senior
cap, those increases do not apply to one-sixth of the roughly 56,000 properties
in Piano that qualify for homestead exemptions, according to local appraisal
data.
Plano Mayor Phil Dyer was a City Council member when the cap passed and
voted for the measure. But even then, he expressed concerns about the
long-term consequences.
The monetary impact is for real, and it’s going to get larger,” he said. “i’m not
in favor of taking it away by any means. But it is going to be a significant drain
on a lot of this city’s resources.’
For that reason, in late 2007, the city of University Park took a different
approach.
instead of adopting a tax cap, the city approved a much larger tax exemption
for elderly homeowners that can be adjusted annually for market conditions.
“Putting a freeze on senior taxes is a one-time forever decision,” said Kent
Austin, University Park’s finance director.
“You make that decision without knowing for certain what’s going to happen
in your community. What if the over-65 population goes from 10 percent to 50
percent of your city? You’ve then frozen half of your tax base.”
2 62017 ll:40A.\l
L’roperty tax cap tor seniors puts sonic LJaL1as—tort \\ oflh cities in a
...
hap: www.dallasnews.com news texas 2010 01 17 Property—tax-cap.
Tweaking the tax caps would be difficult both politically and logistically.
-
Said Dyer of Piano, “It’s something we decided to do. And we can’t really
it. Now, we’re going to have to work around it.” AREA CITIES WITH
TAX CAPS FOR SENIORS
reverse
Arlington
a’
pr,
a
Bartonville
Bedford
Benbrook
Colleyviiie
Crowley
Dalworthington Gardens
2621)1’ 11:40AM
Property tax cap [or seniors puts some Dallas-Fort Worth cities in a
...
http://wndallasnews.cont’news/texas/2OIO/OI/I7/Propeny-tax-chp.
Of course, the impact differs based on a city’s demographics, property values,
tax rates and other factors.
Grand Prairie and Mesquite, for instance, predict modest cap hits to their
budgets.
1 dont think the impact is going to be that significant,” said Diana Ortiz,
Grand Prairie’s finance director. That city has lost about $200,000 so far
because of the caps.
‘Poorly conceived
On the whole, government experts say the logic behind the senior tax caps is
flawed.
“It’s poorly conceived,” said Michael Pagano, dean of urban planning and
public affairs at the University of Illinois at Chicago. “It assumes that, at age
65, everybody retires, your income doesn’t change and you’re not well off. It
has nothing to do with your ability to pay.”
Brown, the author of the tax caps, said, By and large, the freeze has been very
effective for those on fixed incomes.”
But as the broader impact of his legislation has become clearer, he wishes he
had tailored the proposal more narrowly to benefit only those of modest
means.
“1 don’t want to see seniors in million-dollar homes getting a huge tax break,”
he said.
‘of I]
262017 11:10AM
I of8
NATIONAL
CONFERENCE of STATE
CTi NJ1 Oki Rh TNi TX
The property tax is the primary source of
NCSL Resources
revenue for local governments in the United
States. However, according to researchers
Budget and Tax
at the National Center for Policy Analysis,
the property tax has historically been one of
Program
the most unpopular taxes, largely because it
NCSL Contact
is one of the most noticeable taxes, as most
homeowners write a few checks a year to
Budget and Tax
pay for it. For older Americans living on fixed
incomes, the tax can be a concern because of worries over being priced out of their
Program
homes. Because of the unpopularity of the tax, property tax limits have become
common throughout the country. Nearly all states have homestead exemption and
credit programs in place for seniors and other qualifying individuals to exempt a certain amount of a home’s value from
taxation. At the same time, six states have property tax freeze programs that bar property tax increases for eligible
individuals. These programs are usually an optional program for local governments. Ten states have assessment freeze
programs that limit how much property values can increase in a year for tax purposes. The following charts list state
property tax freeze programs and property assessment freeze programs for 14 states (Oklahoma and Rhode Island
have both property tax freeze and assessment freeze programs).
2/6)2017 11:45 AM
LECIS
http://nnv.ncsl.org/researchIfiscal-poIicy/state-property-rnx-freezes-and-assessment-freeze...
STATE PROPERTY TAX FREEZE AND ASSESSMENT FREEZE PROGRAMS
‘I’ll’
(‘Ii’
State Property Tax Freeze and Assessment Freeze Programs
2ofS
Age Requirement
Age 70 or older
Age 65 or older
Year Enacted
2006
1998
State
Connecticut
New Jersey
States with Property Tax Freezes
State Property Tax Freeze and Assessment Freeze Programs
Yes
No
Income limit
The current limit is
$70,000 (both single
or married), but the
limit can change from
year to year. The
program is
essentially a
reimbursement
program: The amount
reimbursed is the
The program is a
local government
option and not a
requirement. Local
governments may set
asset limits. An
applicant must have
lived in Connecticut
for at least one year
before applying. A
surviving spouse who
is age 62 or older
may also apply.
Additional
2/6/2017 11:45AM
http://www.ncsl.orglresearcWfiscal-policy/state-pmpefty-wx-fitezes-and-assessmcnt-&eeze...
3 of8
Age 65 or older
Age 65 or older
Age 65 or older
1996
2009
2006
Oklahoma
Rhode
Island
Tennessee
Mate tropeny lax Lreeze and Assessment Freeze Programs
Yes
No more than
$4,000
No
The program is an
option for counties
andi’or municipalities
and not a
requirement. The
income limit would be
set by the counties.
Applicants would
have to apply
annually.
Improvements to the
property would
increase the tax base
The program is a
local government
option and not a
requirement.
The program is a
local government
option and not a
requirement. Local
governments may set
asset limits.
increase (if any)
above the amount of
property tax paid in
the first year the
applicant qualified.
2/6/2017 1L45 AM
http:f/;nvw.ncsl.orglresearchlfiscal-poticy/state-property-tax-freezes-and-assessment-freeze...
4o18
2003
Age 65 or older
Age Requirement
Age 65 or older
Year Enacted
2000
State
Arizona
States with Assessment Freezes
AZi ARi GAj ILi LAj NMi OKi RIj SDi WA
Texas
State Property lax Freeze and Assessment Freeze Programs
None
Income Limit
No
Disabled
individuals and
permanently totally
disabled veterans
may also apply.
Additional
The program is a
local government
option and not a
requirement. The tax
ceiling is set at the
amount paid in the
year the applicant
qualifies; it may go
up if the property is
improved unless the
improvements are for
repairs or standard
maintenance.
amount.
2/6/2017 11:45AM
http://www.ncsl,orglresearehifiscal-policy/state-property-Lax-freezes-and-assessment-freeze...
5of8
Age 65 or older
Age 62 or older
Age 65 or older
Age 65 or older
2001
1994
1994
2000
Arkansas
Georgia
Illinois
Louisiana
State Property Dix Freeze and Assessment Freeze Programs
Currently less than
$67,000. A limit of
$50000 was set in 2001
and is adjusted annually
by the Consumer Price
Index.
Less than $55,000
Less than $30,000
Yes
Permanently totally
disabled
individuals and
veterans who are
at least 50%
disabled may also
apply.
A surviving spouse
need not be age
65 or older who
otherwise meets
the income
qualification.
This program may
be used in lieu of,
not in addition to,
any other
homestead
exemption.
The income limit is
less than 400% of
the Supplemental
Security Income
benefit rate for
individuals and
less than 500% for
joint owners.
2/6/2017 11:45AM
http://wwwncsl.org/researchifiscal-policy/state-property-tax-freezes-and-assessment-freeze...
6of8
Age 65 or older
Age 65 or older
Age 65 or older
Age 65 or older
2000
2004
2009
1980
New
Mexico
Oklahoma
Rhode
Island
South
Dakota
Mate l’ropefly lax Freeze and Assessment Freeze Programs
Yes
Yes
Yes
Currently less than
$32,000. This limit was
set in 2010 and is
adjusted annually by the
Consumer Price Index.
The income limit is
$25,116.03 (single)
or$31,395.04
(married) and
The state
authorized freezes
for eight towns.
However, the
freeze currently
applies to five
towns; income
limits and other
additional
requirements are
determined locally.
The income limit is
set by the U.S.
Department of
Housing and
Urban
Development for
the applicant’s
county.
Applicants must
apply annually.
2)612017 11:45AM
http://www.ncsl.orglresearchlfiscal-policy/state-property-tax-freezes-and-assessment-freeze...
7of8
1995
Source: NCSL, December 2012
Washington
State Property Tax Freeze and Assessment Freeze Programs
Age 61 or older
Less than $35,000
Individuals who
retire because of a
disability or
veterans who are
100% disabled
may also apply. A
surviving spouse
or domestic
partner of
someone who had
been eligible may
also apply if they
are age 57 or older
and meet all other
requirements.
adjusted by the
Consumer Price
index. The
applicant must
have resided for at
least 200 days of
the previous
calendar year in
the property.
2/6/2017 11:45AM
http://www.ncsl.org/research/flsca1-policy/stateproperty-tax-freezes-and-assessment-freeze..,
8 of 8
•
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Get Involved With NCSL
Jobs Clearinghouse
Legislative Careers
NCSL Staff Directories
Staff Directories
StateConnect Directory
Members Resources
NCSL Member TooLbox
Stale property lax Freeze and Assessment Freeze Programs
• Tel: 1-800-659-2656 or 711
• Accessibility Support
• Accessibility Policy
AccessibiLity Support
• Bill Information Service
• Legislative Websites
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Meeting Resources
2/6/2017 11:45AM
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Has time finally come to eliminate school property taxes? The Morning Call
-
Page I of4
Has time finally come to eliminate school
property taxes?
Debate over school property taxes in Pennsylvania is expected to return to the Legislature in 2017 (THE MORNING CALL
FILE PHOTO)
By Marc Levy
Of The Associated Press
SHARE THIS
Could school property taxes finally be eliminated in Pennsylvania?
f
JANUARY 3.2017.11 11PM
D
HARRISBURG
ebate over school property taxes in Pennsylvania is expected to return to the Legislature in
2017.
Senate supporters say the Nov. 8 election provided the necessaiy votes to eliminate school property
taxes entirely and replace them with other revenue streams.
http:)/www.mcalLcom/news/nationworlWpennsylvaniW
2/3/2017
Has time finally come to eliminate schDol property taxes? The Morning Call
-
Page 2 of 4
That would mean shifting about $14 billion in taxes from property owners, including businesses, to
Pennsylvania consumers and workers through sales and personal income taxes.
An Associated Press analysis of state data found that more than 70 percent of school property taxes
were collected by the wealthiest half of school districts in 2014-15.
Sen. David Argall, R-Schuylkill, will introduce the leading proposal, which would increase the income
tax rate by 60 percent and hike the state sales tax rate by 17 percent while applying it to a wider range
of goods and services, such as groceries, clothing, basic wand funeral services.
In late 2015, the Senate defeated Argall’s legislation by a 25-24 vote, with Lt. Gov. Mike Stack casting
the tie-breaker. The vote split both parties, and the Pennsylvania School Boards Association opposed
it.
But proponents say a pair of incoming Harrisburg-area senators elected in November are replacing
two opponents.
“We believe that gets us to the magic number of 26,” Argall said.
What’s next?
Argall said he will re-introduce the biU in the two-year session that began Tuesday. It would allow the
collection of school property taxes only to retire current debt, would give districts an inflationaxy aid
increase annually and would require voter approval for school boards seeking a local income tax
increase.
Argall said he has discussed eliminating school property taxes with Democratic Gov. Tom Wolf’s
administration, but “the devil is always going to be in the details.”
Wolf campaigned in 2014 as a proponent of reducing property taxes, in part to narrow the wide
disparity between wealthy and poor school districts.
The following year, he proposed a $3.2 billion property tax cut designed to provide the most help to
higher-poverty, higher-tax school districts, such as Allentown, Erie, Harrisburg, Johnstown, Reading
and Scranton. The plan never got a vote.
The governor hasn’t endorsed a plan to eliminate property taxes. His office said that while Wolf
“could support taking steps towards elimination, the details of such a plan are veiy important,
especially how and whether local communities would contribute directly to school funding.”
It is unclear whether Argall’s legislation can pass the House.
http://www.mcall.com/news/nationworlWpennsylvania/
2/3/201 7
Has time finally come to eliminate school property taxes? The Morning Call
Page 3 of 4
-
A Republican plan the House approved in 2015 was designed to reduce property taxes by about $4
billion. But Democrats said the bill would have helped wealthier, not poorer, districts, and it died in
the Senate.
What’s the plan?
School property tax collections this fiscal year likely will amount to
$13
billion to
$14
billion.
Argall’s legislation would increase the state’s income tax rate to 4.95 percent, from 3.07 percent. That
increase would provide an estimated $ billion, with someone earning $o,ooo a year in taxable
income seeing their state income taxes go from $1,535 to $2,475.
The remainder needed to make up the difference would come from increasing the state sales tax rate
to 7 percent from 6 percent and eliminating exemptions on many transactions, including groceries,
clothing and shoes; legal, accounting and financial services; thy cleaning; funeral services; salon
services; basic television services; trash pickup; liquor and beer by the drink; non-prescription drugs;
and tickets to sporting events, concerts and other events.
Where would the money go?
An Associated Press analysis of state data found that more than 70 percent of school property taxes
were collected by the wealthiest half of school districts in 2014-15, the latest data available.
Of the $12.3 billion collected, nearly $ billion of that was collected by the 250 school districts that
are in the top half of average household income, according to AP’s analysis.
Districts in the bottom half of household income collected an average of less than $4,500 in property
taxes per student. School districts in the top half collected nearly $9,000 per student, or twice as
much.
The disparity is greater at further ends of the income spectrum. School districts in the bottom 10
percent of household income collected about $3,100 in property taxes per student, while school
districts in the top 10 percent collected nearly $13,000 per student, or more than four times as much.
Morning Call database editor Eugene Tauber contributed to this story.
AREA DISTRICTS THAT BILL COULD HELP MOST
Per-pupil real estate taxes collected by Lehigh Valley school districts.
Salisbury:
$14,196
in district real estate revenue per student
httpl/www.mcall.com/newslnationworl&pennsylvaniW
2/3/2017
Has time finally come to eliminate school property taxes? The Morning Call
-
Saucon Valley:
Page 4 of 4
$12,291
Southern Lehigh: $n,fl4
Parkland:
$11,291
Catasanqua:
East Penn:
$10,125
$10,029
Bethlehem: $9,995
Northwestern Lehigh: $9,818
Nazareth Area: $9,736
Easton: $9,577
Northampton: $g,x66
Wilson: $8,965
Bangor: $8,692
Northen Lehigh: $8,415
Pen Argyl: $8,336
Whitehafl-Coplay: $8,273
Allentown: $4,489
Source: Pennsylvania Department of Education for 2014-15 school year.
Copyright © 2017, The Morning Call
This ‘atfr(data-c-typename)’ Is related to: Elections, Tom Wolf, David G. Argall, Michael J Stack
http://www.mcall.conilnews/nationworld/pennsylvania/
2/3/2017
ITEP
Policy Brief
Informing the debate over
tax policy nationwide
INSTITUTE ON TAXATION AND ECONOMIC POLICY
5qitci;hcr2i)i I
Property Tax Circuit Breakers
State lawmakers seeking to enact residential property tax relief have two broad options: across-the-board taxcuts
for taxpayers at all income levels, such as a homestead exemption or a tax cap, and targeted tax breaks that are given
only to particular groups oflow-income and middle-income taxpayers. One increasingly popular type of targeted
property tax t’eliefprogram is called a- “circuit breaker” because it protects taxpayers from a property tax “overload”
just like an electric circuit breaker: when a property tax bill exceeds a certain percentage ofa taxpayer’s income, the
circutt breaker reduces property taxes in excess oftliis “overload level. Th ts policy brief surveys the advantages and
disadvantages ofthe circuit breaker approach to property tax relief
• Should the credit he avai able to elderly or non—elderly taxpayers
The Problem: Property Taxes Are Regressive
Residential property taxes are regressive, requiring low-income
or both? Most state circuit breakers target their relief io the elderly,
taxpayers to pay more of their income in tax than wealthier taxpayers.
usually based on the perception that elderly taxpayers have less ability
A November 2009 ITE P analysis found that nationwide, the poorest
to pay taxes. Yet ion elderly taxpayers are susceptible to the same
twenty
percent ofAmer;cans paid
property taxes,
3ô
pro1’ertyux ‘overload ‘as eldei-ly taxpayers As a result, nuns states
percent ot’their income in
now extend circu:t-breaker benefits
compared to 2Z percent oñncome tar middle•income
to
their under 65 population
taxpayers and 0 percent ofincome for the wealtiuest I percent of
Americans- The main reason property taxes are regressive is that home
-
Should the credi the limited to homeowners, or extended to
renters as
values are much higher as a share olincome for low-income families
well? It is generally accepted that owners ofrental real
than for the wealthy. Bec,iuse property taxes are based on home values
estate pass through some
rather than income, property taxes are disconnected from “ability to
the term ofhigher rents. For this reason, a growing number ofstates
pay considerations in a nay that income ta XL’S are not a Ia spayer nile
now extend en’cut breaker ehgihilit to renters For example, Illinois
suddenly becomes unemployed will tnd that her property tax bill is
law assumes that 25 percent of ‘ent is property tax, and therefore
unchanged. even though icr ability to pay
allows low•incoi,ie renters to claim .icre dt when this “property tax’
-
of
their property tax liability to renters in
-
it lax
killen.
exceeds 3.5 percent ofdieir inconle But many states still provide no
property tax relief to low -nicoine renters.
How Circuit Breaker Credits Work
The basic idea behind the circuit breaker’ approach to property tax
relief is quite simple: taxpayers earning below a certain income level
•
tv\That
should he the maximum income level for eligibility? This
should be given sonic amount of property tax rcliefwheii their property
is perhaps the most inipoi-tant decision in determining the cost of
taxes exceed a certain percentage of their income- But the thirty three
the credit. In 200, income limits on state circuit breakers ranged
states, plus DC, that have implemented this basic idea have made very
from 53500 in Arvona to 599.240 iii Minnesota Many states extend
diffeient choices about who should receive the credit, and how the
eligihilty only to the very poorest homeowners, despite the fact that
credit should he calculated, There are a series of basic choices to make in
fast-growing pi’operty taxes can hebtirdensome ICr middle income
designing a circuit breaker-
taxpayers too.
www.itepnet.org
• [email protected]
IóIóPStreer,NWSuiie 200’ Woshiogtoo,DC20036 Tel: 202-299-1066 ‘Fax: 202-299-7065
-
!E1’
Policy Brief
• What cap should he imposed on the credit? Every state limits the
dollar amount that can he claimed. These limits range from 575 in
federal Taxes: A Primer on the Federal Offset’ for mole
information)
-
New York to SS,00t) in VermonL
Because circu:t
• Should the maximum income level, or the maximum credit, be
indexed for inflation? Failing to tie the value olthe credit to
inflationary ga’xs
tli will reduce tile real value ofthe credit each year
Indexing income limits (and the maximum
credit amount) for
breaker credit amounts vary with income, the use of
these credits inti-oduces an ‘ability to pay’ criterion that the property
tax lacks. C::-cuit breakers identiI the individual taxpayers for
whom property
Li xes
are most hurdensoine
and rcdue their tax to
manageable level
inflation helps to ensure that circuit breakers continue to provide
meaningful low-income tax rebel in the long run. Many states have
Disadvantages of Circuit Breakers
unwittingly allowed the value oftheir circtnt breakers to decline over
1 he nia:n drawback of circuit breakers is that, in general, they only are
time by i gnu ri I ig Ui e impact of ii illa U on.
given to taxpayers who apply for them, (By coilti’ast, general ‘homestead
exemptions’ aie given automatically.) Eligible taxpayers will only apply
• What percentage of income should he considered an
for circuit breaker credits if they are aware of their existence. This means
overloaded pi-operty tax bill? Some credits have no threshold: all
that an essential component 0f a circuit breaker prog:’ain must he an
ow income taxpayers are deemed worthy oftax relief Others require
educational outreach effort designed
taxes to exceed a tlwe,hod. for example, Illinois taxpayers can only
credit. In addition, one way of making
claim the credit ittlwir property taxes exceed 15 pci-cent of their
claim the circuit breaker is to offer the option of claimingthe credit either
income.
on income tax forms, or on a separate circuit breaker form (hr those who
to inform state taxpayers of
it
the
easier ior eligible taxpayers to
do not have to file income tax forms.
Advantages of Circuit Breakers
The circtnt breaker is tile on1 form of property tax reliet’that is explicitly
Conclusion
designed to reduce the property tax load on those loxs’-inconw taxpayers
Circuit hreakers are an attractive apr’roacll to property tax relief because
I lit Ii a id ext I’ V tile tax- Ci rc u it breakers of Per several ad san tages over more
they are less costly (and better targeted)
general property tax relief measures
relief mechanisms sue h
as tax caps
than “across tile
board tax
-
and homestead exemptions (See
I ‘hP [frieS, Capping Assessed Valuation Growth: A Primer
• Circuit breakers are targeted to selected income groups As a result,
and Property Tax Homestead Exemptions”). These c:’edits are a
they are much less expensive than across the hoard’ property tax
valuable tool for lass makers seeking to lessen the property tax load on
breaks
and the benefits go to the taxpayers for whom property
taxes--are most burdensome.
•
1 he low-incomet axpa ers who typically benefit frc’ill circuit breakers
do not itemize their federal income taxes, so this Form of property
tax relielis usually not offset by increases in federal income taxes.
By contrast. property tax cuts tor’x ealthier taxpayers will result in
a federal income tax hike since these cuts will reduce the amount
of state tax that wealthy taxpayers can write offon their tderal tax
forms,
(See ITEP Brief; ‘How State Tax Changes Affect Your
their most vulnerable residents, without busting the state budget