MMA testimony to Revenue Committee opposing 7 bills that would adversely impact local revenues
July 9, 2013
The Honorable Michael J. Rodrigues, Senate Chair
Joint Committee on Revenue
State House, Boston
Dear Chairman Kaufman, Chairman Rodrigues and Distinguished Committee Members,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association appreciates the opportunity to offer testimony on several bills relative to property tax before the Committee today.
In addition to the specific comments regarding the seven bills discussed below, we respectfully request that you issue an unfavorable report to all bills that are not local option, or that would make changes to previously adopted local-option sections. Imposing new conditions and rules on communities that have already voted to adopt local-option statutes may be legal, but it is very poor public policy and undermines the local-option process by discouraging communities from adopting local-option laws out of fear of future changes that would mandate costly and unexpected burdens. Further, we request that you similarly issue an unfavorable report to non-local-option bills that would have a negative impact on municipal revenue receipts or that would create an administrative burden at the local level.
S. 1319, An Act Relative to Senior Citizen Property Taxes, would, among other actions, allow property in a senior citizen property tax deferral (under Clause 41 of Chapter 59, Section 5) a one-year extension after the death of the property owner at the 8 percent interest rate set in Clause 41. After one year, the interest rate would revert to 16 percent (as set by Chapter 60, Section 62). Under current law, the interest rate reverts from 8 percent to 16 percent upon the death of the property owner. The MMA opposes S. 1319, as this change would reduce interest payments to cities and towns and thus have a negative impact on local taxpayers.
S. 1346, An Act Expanding Senior Tax Reductions for Volunteer Services, would allow a Council on Aging in a municipality that has adopted Chapter 59, Section 5k (relative to a reduced property tax liability for seniors citizens in exchange for volunteer work) to include qualifying homebound persons over the age of 60, at the Council’s option. The legislative body of a city or town adopts this section of the law, and any changes to the section should be subject to a vote of the legislative body. The MMA opposes S. 1346, as this legislation would interfere with the existing local-option statute and impose new requirements onto the community without proper consideration and approval by the legislative body.
H. 2545, An Act Providing for a Certain Real Property Tax Exemption, would create a property tax exemption for owners of real estate, aged 65 or over, in cities and towns within the water or sewer system of the Massachusetts Water Resources Authority. The exemption would be equal to 50 percent of the charges paid to a city or town for water or sewer. However, this bill is not local option and would decrease property tax revenue for municipalities within the MWRA region. The MMA opposes H. 2545, as it would effectively impose an unfunded mandate on cities and towns in violation of Proposition 2½, and would negatively impact municipal finances.
H. 2584, An Act Relative to Certain Real Estate Tax Exemptions, would make changes to the eligibility standards relative to income for senior citizens qualifying for tax exemptions (under Chapter 59, Section 5, Clause 41C). Under current law, senior citizens may qualify if their annual income is not more than $13,000 if single, or $15,000 if married. This bill would increase the eligible annual income to not more than $20,000 if single, or $30,000 if married. Clause 41C is adopted through local option, but this change would impact municipalities that have adopted it previously with the understanding that the income eligibility was $13,000 if single, $15,000 if married. The MMA opposes H. 2584, as this legislation would interfere with the existing local-option statute and impose new requirements onto the community without proper consideration and approval by the legislative body.
H. 2597, An Act Relative to the Property Tax Deferral, would make changes to eligibility standards relative to age and income for senior citizens qualifying for property tax deferral (under Chapter 59, Section 5, Clause 41A). This bill lowers the age of eligibility to 60 from 65, and raises income eligibility to a maximum of $62,000 annually from $40,000 annually. This broadened eligibility criteria could result is a significant increase in the number of property tax deferrals, which would negatively impact municipal revenue receipts and endanger the provision of critical local services. The MMA opposes H. 2597 for these reasons.
H. 2716, An Act Providing Property Tax Relief for Certain Caregivers, would create a $3,000 property tax exemption for a caregiver to a spouse or dependent over the age of 65. However, the clause is not local option and would require municipalities to offer this exemption, regardless of the impact that it might have on municipal finances, creating a new unfunded mandate on cities and towns. The MMA opposes H. 2716 for these reasons.
H. 2742, An Act Extending Time for Veterans and Seniors to Pay Property Taxes, would give veterans and senior citizens over the age of 60 an additional 10 days past filing deadline to pay their taxes. This could create a complex administrative burden at the local level and would mandate this change, rather than providing it as a local option to be considered by the community. The MMA opposes H. 2742 for these reasons.
We deeply appreciate your sensitivity to the importance of safeguarding cities, towns and local taxpayers from costly unfunded mandates and requirements. Communities give top priority to administering the property tax in the fairest manner possible. We urge you to issue an unfavorable report to the bills referenced above that would impose a negative impact on municipal revenue or procedures, and instead ask you to give consideration to proposals that would provide local-option tools to maintain and expand local tax relief efforts. If you have any questions regarding this important issue, please do not hesitate to have your staff contact John Robertson or Catherine Rollins of the MMA at any time.
Thank you very much.
Geoffrey C. Beckwith
Executive Director, MMA