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.

Follow Allen Etzler on Twitter: @AllenWEtzler.

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(29) comments

mysameoldname

Never mind prior comment. I am now understanding the credit would be capped at first $300,000 of property value. Duh.....

mysameoldname

I would think the $300,000 property value limit would disqualify many people also. I have a modest 3 bedroom house and it's assessed at more than $300,000 so I would be disqualified even if I had lived there 40 years. The property values in this county are pretty high for all houses.

gary4books

My last word on this article: Wikipedia - "In legislative debate, a wrecking amendment (also called a poison pill amendment or killer amendment) is an amendment made by a legislator who disagrees with the principles of a bill and who seeks to make it useless (by moving amendments to either make the bill malformed and nonsensical, or to severely change its intent) rather than directly opposing the bill by simply voting against it. "

gary4books

I just found this from last year: Frederick County MD : Executive Gardner Urges Seniors, Homeowners & Renters to Take Advantage of Tax Credits to Save Money



0

07/07/2017 | 12:20pm EDT
County Executive Jan Gardner encouraged seniors, homeowners and renters to take advantage of available tax credit programs. She highlighted the Maryland Homeowners' Property Tax Credit for homeowners of any age, the Frederick County Senior Tax Credit, and the Renters' Tax Credit.
'I want to make sure people know they may save some money by taking advantage of these tax credits,' said Executive Gardner. 'Last year, Frederick residents saved more than $3.7 million through these programs, yet many people don't know about them.'

How many knew they had to be in their homes for 40 years?

niceund

According to staff, the requirement to live in the same home for 40 years comes from the state. It's a stupid requirement but State officials need to change it before County officials can. My concern is that a retired military person could move into Frederick County tomorrow and be eligible for the credit. While most seniors who live in the county for a long period of time are not eligible unless they've stayed in the same house for 40 years. Totally unfair.

public-redux

I agree that it is unfair for government to impose different property tax rates based on income, age, assets, length of ownership, or previous employment.

User1

Maybe should also apply toward income tax.....no exemptions, make everyone equal! Flat tax based on income. No extra money for age, or the number of kids you can’t afford. Yea, flat tax....all equal.

gary4books

And "out of left field." It was never part of the bill that passed in May as reported. Totally unexpected and never explained. Why 40 years? I never saw it in the Maryland state web pages. Why not 30? Or even 30?

gary4books

Montgomery County has 40 years residency, but the state page does not have that requirement, https://dat.maryland.gov/realproperty/Pages/Homeowners%27-Property-Tax-Credit-Program.aspx

gary4books

I see that Montgomery County has the same 40 year rule and defines a military retiree as one who was in the military for all of their service. Even though my federal service was three years in the Army and one year in Vietnam and my CIA service was six years and all in Vietnam. Not much difference in service.

User1

Did you retire or just quit? Let’s see.....3+1+6=10 years. Difference in service is ADD 10 years to qualify as retiree. If we make everyone move every 18-36 months maybe then they’ll understand part of the sacrifice we make. Just stating a fact...would do it over again the same. Back then we felt a duty to our country to serve unlike today.

gary4books

It may not be too late to change the State law about 40 years. The tax starts July of Next year.

User1

Sorry about your concern on the military coming in a “taking” the tax credit. One of the freebies of my 21 years Army was I was always transferred every 18-36 months. Totally unfair I was out fighting the wars and conflicts that made it safe for you to stay in your house. My 21 years only had 5 years stationed in the states and that’s not counting deployment times out of country. Rather have it like Pennsylvania where military and government retirement pay are exempt in full. But stay safe in your house.

TinaS

It's almost a sensible compromise but who lives in their house for 40 years? There are lots of great reasons for seniors to move - downsizing, closer to children, no stairs, less maintenance, adult communities, a great deal, etc. They're still poor, they are still in our community. As for limiting the military retirees who qualify, I think that's fine.

gary4books

They talk about income limits and age limits, but time in the home is what I expect to be the limiting factor. Very clever politics.

MD1756

It is simply a feel good piece of legislation that helps very few but the politicians can hold it up and say "look at what we've done to protect our seniors." It would be interesting if MoCo or Frederick county actually published information on how many people qualify (broken down by military service, or 40 years in the same house, etc. I've lived in MoCo 3 times (32 years) but only the last time (24 years) counts because I've lived continuously in the same house.

sofanna

"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."

I would like someone on the Council to present an article to the FNP regarding how $600,000 will address "shortcomings". Do the shortcomings have anything to do with the Hotel for downtown Frederick that the citizens are going to end up pay for? Please be specific.

Who on the Council is 65 or older?

gary4books

Better yet - "Who will be 65 or over?" These people can plot for the future.

gary4books

How does this relate to an earlier tax credit this year that did not require people to have lived in their homes so long?
"County passes senior tax credit
By Kelsi Loos kloos@newspost.com May 15, 2018 5

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A tax break for seniors forged as a compromise between council members who don’t often see eye to eye got unanimous support from the Frederick County Council.
The legislators quickly approved the measure from councilmen Jerry Donald (D-District 1) and Kirby Delauter (R-District 5) on Tuesday that would give tax credits to residents 65 and older who earn less than $80,000 a year. The credits would apply only to the first $300,000 of assessed property value.

Low-income senior households, those who earn $30,000 per year or less, would see 40 percent off their tax bills."

gary4books

I was wrong. This is a significant amendment.

public-redux

The three votes for more welfare came from the Republicans. Sad.

Dwasserba

"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." I' m a senior, I agree. We should be looking to live where we can afford, not looking to make where we are affordable. When was MD afforable, it was nice while it lasted. Adapt, evolve.

MD1756

Taking that logic, let's apply it to the income tax and eliminate income tax deductions and tax credits. Why should parents be given income tax deductions and more importantly tax credits when, ceteris paribus, they use more governmental services. Eliminate tax deductions and tax credits for having children and put that money towards the education of their children.

CreativeCakes

Raising a kid is expensive. You either need to have one parent stay at home or both parents working, which generates a childcare bill.

Larger macro socioeconomic trends are leading towards declining birth rates which impacts the tax base. We have an economy based on service jobs that can’t support a family on a single income. Immigration rates are dropping for a variety of reasons. Add it all up and you need to do everything you can to encourage more, not less, kids.

As a progressive millennial liberal who plans to retire from the military AND live in his house for 40 years in Frederick, what’s the larger economic benefit of this tax break? Why is it better to keep retirees in giant houses? Why is iit better to let someone collect passive income totally tax free, when they could / did probably work a second job and have a pension and 401k from that job too? The county shouldn’t be hostile to seniors but i don’t see the economic imperative to subsidize them.

MD1756

I don't see an economic imperative to subsidize an unsustainable growing population. Population growth is the primary cause of human impact on climate change. If you want children, plan accordingly. If you can't save enough to meet your own needs you probably can't afford children. We don't always get what we want in life, and we should think long and hard before asking others to subsidize one's chosen lifestyle. Before having children, people should be thinking about reducing their environmental footprint, not increasing it. I'm not saying that any county should give tax breaks for this and that special interest but since the county does, and if it wants to be equitable, it should provide some benefits back to those who do not strain the county's resources. Do you think it is fair to keep increasing taxes and force someone to move out of their house because population growth has increased the property values (population growth is not the only factor in property values increasing, but it is certainly a major factor)?

User1

But..but..but...it’s my human right to have as many kids as I want if I can afford them or not! It’s my right to have kids and make my coworkers take up the slack when I’m off on paid maternal leave for 4 months. People have gone crazy! There is no incentive to live within your means when everything is considered to be a “human right”. New house, new car, new iPhone, free wi-fi, free health care.

RepublicanRussian

A sensible compromise

gary4books

You think so?

gary4books

Come on Russian. Denounce me for good reason. Get a storm going here.

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