2019-03-25-AC-ATM-rpt - Laserfiche WebLink

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APPROPRIATION COMMITTEE-2019 ATM FY2025. In the years following that,the reduction in annual revenue from the lower CPA surcharge would constrain the scope of new CPA projects. It would become more difficult for the Town to acquire open space, develop affordable housing,preserve historic resources, and develop recreational facilities. While it is possible to fund such projects using non-CPA funds, the frequency of such projects increased notably after 2007, the first year that CPA funds became available. The Committee supports indefinite postponement for this article. Article 5 Establish Qualifications for Tax Deferrals Funds Requested Funding Source Committee Recommendation None N/A Approve(9-0) This article proposes to raise the income threshold for participation in the Town's tax deferral program under G.L. c. 59, § 5, Cl. 41A from $70,000 to $75,000. Under the deferral program, qualifying residents age 65 or older can postpone payment of some or all of their property taxes, in an amount up to half the value of their home,until the property is sold or otherwise disposed of For general background on Clause 4 1 A and other programs offering property tax relief to seniors,please see Appendix D to this Report.2 The 41A Program and the Home Rule Petition Under generally applicable state law, the highest income threshold a Town may adopt for participation in the Clause 41A program is the limit established by the DOR each year under the state's Circuit Breaker program for a single person who is not a head of household, currently $58,000. In 2008, in response to a home rule petition, the state legislature enacted a special law (Chapter 190 of the Acts of 2008) allowing Lexington to expand eligibility beyond that permitted under the general laws. The special law permits the Town, by vote of Town Meeting and with the approval of the Selectmen, to set its own income limit for deferrals.3 Town Meeting most recently raised the income threshold from$65,000 to $70,000 in 2016. The Proposed Increase This year, the Tax Deferral and Exemption Study Committee (DESC) has recommended that the Town increase the threshold by an additional$5,000 to $75,000 and the Board of Selectmen has voted to approve such an increase. The change is intended to help ensure that all persons who have been participating in the program can continue to do so, and to allow more residents to participate. With a history of low utilization, and a participation rate that has not materially changed after the most recent increase in the income limit, as illustrated by the chart below, it is unlikely that this change will add significantly to the number of deferrals or produce a material impact on the Town's finances. 2 brochure prepared by the Selectmen's Tax Deferral and Exemption Study Committee entitled Property Tax Re- liefProgramm is available on the Town web site: http://www.l exi ngtonma.gov/assessor. The site also has detailed information about who qualifies for Clause 41A deferrals and the application process. ' The special law also permits the Town to adopt a lower age of eligibility than 65, or to condition eligibility on objective criteria of disability or other hardship for persons who would not otherwise qualify based on their age,but the Town has never done so. 7