Commissioners debating tax relie

Commissioners debating tax relief

Hugh G. Willett news-herald.net

Loudon County Commission is discussing several options for lowering property tax burdens on disadvantaged residents.

At a Feb. 22 workshop, commissioners discussed several tax abatement options for specific classifications, including low-income seniors and disabled veterans.

Commissioners heard from Property Assessor Mike Campbell and Trustee Chip Miller since both offices would be involved in implementing any changes approved.

Campbell’s office would be required to assess properties to make sure they were eligible for the tax freeze program. Miller is responsible for collecting tax assessments from property owners.

Bryan Kinsey, director of the Tennessee Comptroller’s Division of Property Assessments, provided a written presentation outlining aspects of the tax freeze and tax relief programs. Kinsey oversees the division’s office in Nashville and provides technical assistance to local governments.

The county has two basic options to provide tax help to property owners in specific categories.

Kinsey said tax freeze and tax relief programs are available. A resident that meets the qualifications might be eligible for both.

The tax freeze program allows eligible seniors aged 65 and older to freeze their taxes at the amount for the year they qualify. County property owners would need income of $42,000 or less per year to qualify, and income limits are adjusted annually. The property owner must file every year to participate.

First approved by Tennessee voters, including Loudon County, in a November 2006 referendum, the Tax Freeze Act of 2007 permits local governments to implement the program. According to the state, 23 counties and 33 cities have adopted the program, including the surrounding counties of Anderson, Blount, Campbell, Hamblen, Knox, Roane and Sevier. Commissioners would have to approve the program.

Commissioner Julia Hurley said the Tennessee County Commissioners Association is reviewing related legislation that will impact every county. She said changes on the commission after the May election could impact how the county moves on issues such as tax abatement.

Kinsey said local governments adopting the tax freeze bear the cost of administering the program and the forgone tax revenue. During reassessment years, the value of the property will be frozen at the qualifying year. The office of the assessor must determine every year if the property has increased in value through improvements.

County offices must report to the state each year the number of properties affected by the tax freeze and specific tax amounts. There is a state website-based program that will help local governments administer the program and allow applicants to apply online.

“The tax freeze would be a new program and fairly labor intensive to manage,” Miller said.

He said he would probably have to add an additional staff member to his office to handle the extra work load.

Campbell said his office would also have to add personnel to administer a tax freeze program.

Both Campbell and Miller agreed the program would be more complicated because assessing property value and other requirements are specific to each taxpayer. Tax freeze applications must be approved by local officials.

The tax relief program administered by the state is already used in the county. Tax relief would not require additional training or manpower to expand and must also be applied for annually. Property value is limited at $30,000 for low-income elderly and $175,000 for a disabled veteran and surviving spouse.

Tax relief might benefit more residents because the categories served are broader and maximum income is $31,000 per year. Tax relief can be used by elderly resident 65 years or older as well as disabled residents of any age and disabled veterans of any age or their surviving spouse.

About 794 people in the county already receive tax relief, and the county matches the state relief to a certain level. The state currently provides $140 per year. The total relief amount cannot exceed the total tax amount.

Campbell provided an example of a tax relief situation. Under the existing tax relief program, if a resident paid $260 per year in property taxes, the state would pay $110 and the county would pay $110. The resident would pay the remaining $40.

The county would have the option of increasing the contribution to include an additional match of $40 or more to a maximum total taxable amount of $330. Commission would have to approve the additional match.

Commissioner Gary Whitfield said he has not decided whether tax relief or a tax freeze is better for the county. He said tax relief is available now but is limited. A tax freeze requires a year to put in place and a tax increase to be passed before it can provide help to taxpayers.

“Loudon County hasn’t had a tax increase in 10 years,” he said. “If there isn’t another tax increase for another 10 years, the tax freeze won’t be working for residents until then.”

Commissioner Van Shaver said he was interested in learning more about both programs. He said he would be hesitant to add new employees to the county budget while at the same time decreasing revenue to the county. He said he would consider increasing the county share of tax relief to qualified residents.

Other commissioners are also interested in an increase to the county match for tax relief.

Commissioner Kelly Littleton-Brewster said she would support such an increase because it will help elderly and low-income residents immediately.

“The whole idea is to start helping people,” she said. “Let’s up our match.”