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APPROPRIATION COMMITTEE-2019 ATM
<br /> The 41A deferral program is an attractive form of tax relief from the Town's point of view because it is
<br /> essentially revenue-neutral. While the unlikely event of a significant increase in the number of participants
<br /> in could potentially create a short-term cash flow problem,the Town is in effect making well-secured loans.
<br /> The Town anticipates repayment of all deferred taxes with interest, and over time an equilibrium should be
<br /> reached under which as many deferral agreements are repaid as are entered into.
<br /> The total amount of deferred taxes now carried by the Town as accounts receivable is shown below.
<br /> The "41C"Exemption Program
<br /> For many years,the Town has made available to qualifying seniors a property tax exemption under Clause
<br /> 41 of G.L. c. 59, §5, and its successor, Clause 41C. Under the "41C" Program, the Town receives partial
<br /> reimbursement from the State for exemptions defined under the program, subject to appropriation. The
<br /> portions of the exemptions that are not reimbursed are funded from the Town's overlay account.
<br /> Prior to 2004, the amount of the credit was limited to $500 per year and eligibility criteria were quite
<br /> restrictive. Since then, the Town has taken a number of steps to expand both eligibility and the credit
<br /> amount. Taking advantage of new local options made available by the legislature in 2002, Town Meeting
<br /> voted in 2004 to:
<br /> • Increase the amount of the exemption to $750.
<br /> • Lower the age of eligibility from 70 to the minimum allowed age of 65.
<br /> • Increase the income threshold from$13,000 (single)/$15,000 (married)to the maximum allowed
<br /> amount of$20,000 (single)/ $30,000 (married).
<br /> • Increase the threshold for personal assets, not including the home, from $28,000 (single) /
<br /> $30,000 (married)to the maximum allowed amount of$40,000 (single)/$55,000 (married).
<br /> In 2005, Town Meeting voted to adopt the provisions of G.L. c. 59, § 5, Clause 41D, which automatically
<br /> adjusts the income and asset limits for Clause 41 C(but not the exemption amount)by a COLA established
<br /> annually by the state Department of Revenue. The current income and asset limits are detailed in the table
<br /> below.
<br /> In 2006, Town Meeting voted to increase the exemption to the maximum allowable amount of$1,000.
<br /> The Senior Service Program
<br /> Low-income seniors may perform volunteer work for the Town in exchange for a reduction in their property
<br /> tax, currently up to a maximum credit of$1,540 (see table below). The Senior Service program, formerly
<br /> funded from the overlay account, is now funded as part of the Town's annual budget and is subject to
<br /> appropriation.
<br /> In 1999, the state legislature authorized cities and towns,by accepting G.L. c. 59, § 5K, to offer residents,
<br /> age 60 and over, the opportunity to reduce their property-tax obligation by up to $500 in exchange for
<br /> community service." Lexington, which had earlier maintained its own program, accepted this statute
<br /> shortly after it was enacted. The statute allows towns to set their rules and procedures for implementation,
<br /> but limits participation to persons age 60 or over and also limits the hourly credit to the state's minimum
<br /> wage.
<br /> "In 2002,the maximum amount of the Section 5K credit was increased to$750. In 2009 it was increased to$1,000,
<br /> and in 2016 it was increased to $1,500. The 2010 Municipal Relief Act added a provision allowing towns to adopt a
<br /> local option to set the limit at 125 hours of service at the prevailing minimum wage($11.00 per hour in 2018,scheduled
<br /> to increase to $12 per hour in 2019), which would automatically increase the limit if the minimum wage increases.
<br /> Thus,the Lexington program is now slightly more generous than would be permitted under the general stats laws.
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