A tax credit aimed at giving a break to retired military personnel and elderly residents received an income and property value cap, but will still be available to most retired veterans.
An amendment proposed by Jerry Donald (D) to a bill passed in May added an income cap of $80,000 and a property value cap of $300,000 to those applying for the tax credit. The amendment passed by a 4-3 vote along party lines, with unaffiliated Council President Bud Otis being the swing vote.
Donald proposed the amendment to bring the bill in line with other tax credits the county offers, calling it “a matter of fairness.” The previous bill did not include any income or property value caps, which the Republicans on the council argued serves as an incentive to keep retired military personnel in the county.
The bill takes 20 percent off the property tax bill of qualified seniors and veterans for up to five years. To qualify for the tax credit, a person must be at least 65 years old and has to have lived in the same dwelling for at least the preceding 40 years, or a person who is at least 65 and is a retired member of the uniformed services of the United States, the military reserves or the National Guard.
The credit will be available starting in tax years starting July 1, 2019.
At the public hearing for the bill Aug. 21, three retired military personnel spoke against the amendment, saying it took away a much-needed tax credit for some in a state that already taxes retirement as income.
But most retired military personnel will still qualify for the tax credit, according to the county staff fiscal note. U.S. Census data indicates that more than 66 percent of people over 65 do not have an income of more than $80,000.
“If they have a good, solid income, they don’t need the tax credit,” Donald said. “It’s not going to be used for anything but putting it in their pocket.”
Donald argued that not having a cap on the tax credit costs the county an additional $600,000, according to the county staff fiscal note. The original bill that passed would cost the county around $1.7 million assuming a 50 percent participation rate, according to the staff report. The amendment would take that number down to about $1.1 million.
Council Vice President M.C. Keegan-Ayer (D) supported the amendment, saying the savings could be used to address some “shortcomings” in the budget in coming years.
Councilman Billy Shreve (R), who proposed the original bill with no income limits, argued that the council has voted to increase the budget by $80 million over the last four years and is spending “a zillion dollars” to keep seniors in the county, so $600,000 isn’t a lot of money, relatively speaking, and, he said, would help keep seniors in the county.
Keegan-Ayer and Donald both said that they didn’t want to favor a particular group over another with tax credits.
“If we keep creating tax credits for different groups with no income limit or property value limit, at the end of the day we won’t have any money to run this county,” Keegan-Ayer said.