2006-TDES-rpt - Laserfiche WebLink

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RECEIVED TOWN CLERK Tax Deferral and Exemption Study Committee LEXINGTON MA ROLE: To study,understand, and evaluate options for helping lower income citizens,particularly seniors, with their property taxes.To research existing state legislation that enables local tax exemptions and deferrals,estimate the probable cost to the town budget,and advise the Selectmen on the costs and benefits, pros and cons of each option.In addition,to track new legislation currently under development by the State and to encourage legislation beneficial to town interests. APPOINTED by the Board of Selectmen: Chair Vicki Blier,Marilyn Campbell,Patricia Costello,William Kennedy,and Thomas Taylor.Board Liaison,Norman Cohen. Appropriations Committee Liaison,John B artenstein. HIGHLIGHTS: *Advised the Selectmen regarding a Motion before Town Meeting to increase the Senior Property Tax Exemption benefit from the existing$750 to the maximum allowable amount of$1,000. The motion passed unanimously.In FY2006,49 seniors received the$750 deferrals. *Advised the Selectmen regarding a Motion before Town Meeting to adjust the interest rate that qualifying Seniors pay when they postpone paying property tax under the Senior Tax Deferral program. A recent change in state law allows the towns to set a rate that is lower than the previously mandated 8%rate. This motion proposed to make Lexington's deferral interest rate variable(but not to exceed 8%)and base it on a published treasury index that historically approximates the cost to the town of accepting deferrals.The motion passed unanimously. As a result,the rate for 2007 will be 4.77%simple interest. In FY2006,under the higher interest rate law, sixteen seniors deferred$36,750.00 in property tax. *At the request of the Selectmen,the committee researched and prepared a report on a state tax option known as The Residential Exemption.The Residential Exemption is a mechanism currently used by 11 cities and towns in the Commonwealth that shifts the property tax burden from lower-valued owner- occupied primary residences onto higher-valued homes,non-owner-occupied homes and apartment buildings and non-primary residences.The committee sought to identify the pros and cons of the Residential Exemption,but did not take a stand on whether it should be implemented in Lexington. The Selectmen declined to adopt the Residential Exemption for FY2007.