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Tax credits to shrink for elderly, disabled
By
FRANK VINLUAN Des
Moines Register 07/28/2003 Janice Killian can detail, between emphysema-shortened breaths, her medication costs, her food and utility bills, and what she paid last year in property taxes. It's the tax bill that has her worried. "That's why I work," the 66-year-old part-time mailroom worker said. "That's why a lot of seniors work." Killian, who lives on Des Moines' east side, didn't know until recently that low-income elderly people can get help to lower their tax bills. Then she learned what many senior citizens will soon find out: For the second year in a row, Iowa will not fully back tax credits for the elderly and the disabled. The shortfall means more than 2,000 low-income elderly property owners in Polk County and thousands more statewide could face higher tax bills next month. Tax credits reduce the amount of tax owed by property owners. The amount granted to low-income elderly or disabled Iowans is determined in part by income. Iowans who earn more than $17,588.99 are ineligible. It's a case of the poor getting poorer, Polk County Treasurer Mary Maloney said. "It's unfortunate that the people that are least able to contribute and have contributed for a lifetime are the ones hurt by this," she said. **** Iowa lawmakers set aside money to reimburse counties for tax credits. The credits are granted to property owners in several categories, including farmers and soldiers. The Legislature capped the amount for credits in 2001, said Joel Gabrielson of the Iowa Department of Revenue. Problems arose as the number of qualified elderly homeowners grew. Gabrielson sent a letter last year to county treasurers that said the state could reimburse 80 percent of the elderly tax credit. It turned out he was overly optimistic. When the credits were tallied, the state could reimburse a little more than half. More people had applied than expected, he said. With the cap still in place, Gabrielson estimates this year the state can cover 40 percent. The difference will either be picked up by counties or passed on to taxpayers. Meanwhile, the prices senior citizens paid for their most-prescribed drugs rose three times the inflation rate in 2002. And Iowa has the nation's fourth-highest percentage of residents 65 or older. With low interest rates dampening retirement income and a sluggish overall economy, Maloney expects more requests for help. **** The first bill of the legislative session called for the state to fully back the tax credits. Tight finances changed that. Now Maloney worries that the growing number of eligible property owners might make it difficult for the state to cover even 40 percent of the senior credit. Killian's problem is compounded by the fact that she pays property taxes on her home under terms of a rental agreement. Because the property is not in her name, she does not qualify for the credit. She will look to low-income rent reimbursement, which has the same income guidelines and is not under the same pressures as the other elderly and disabled tax credits. County officials point out that those who qualify for the tax credit are allowed to buy time without penalty if they can't make the August payment. Polk County restricts tax suspension applicants to those with $10,000 or less in assets, including savings and investments, or with homes assessed at no more than $80,000. Exceptions can also be made, for example, if a taxpayer faces extraordinary medical expenses, county social worker Kathy Jacob said. "What the program does is keep people in their homes, keep money in their pockets," she said. "They can address other needs." **** Some counties, such as Chickasaw and Johnson, plan to pick up what the state can't deliver. Dallas County officials, who covered the shortfall last year, have not yet determined whether they will do it again. Polk County, which had wrestled with a $12 million budget deficit earlier this year, can't afford to pick up the shortfall, Maloney said. Also, the counties that pay the difference have a fraction of Polk County's elderly population, she said. Before notices are sent out next month, last year's credit applicants will receive a letter that explains the situation and warns the elderly that tax bills could be steeper than they budgeted for. Killian plans to call county officials for help. If her tax bill is too steep, she can ask her children for help, she said. She paid $1,250 in taxes last year and expects next month's bill to be higher. "They're going up at an alarming rate," she said. "But isn't everything else?" CREDITS: For information about tax credits, call the Polk County Treasurer's tax division at (515) 286-3060. MORE TIME: For information about Polk County tax suspensions, call Polk County General Assistance at (515) 286-2088. Copyright
© 2002 Global Action on Aging |
