Tax credit proposed for senior citizens in Frederick, Md.

Adam Behsudi

Aug. 21, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- The City of Frederick could provide seniors an additional 5 percent discount on their tax bill under a proposal presented to the Board of Aldermen on Wednesday.

The plan would piggyback on a statewide homeowners' property tax credit program that gives seniors age 70 and older extra tax relief.

Advocates welcomed the proposal but said it is not a cure-all to the problem of seniors being taxed out of their homes.

"It's just a hidden poverty that we don't see," said Shirley Sandage, an 82-year-old city resident who led a survey four years ago that polled more than 1,200 seniors on issues they face in Frederick County.

Tax relief was at the top of the list, she said.

The proposed plan relies largely on an existing statewide property tax credit. Depending on income and the assessed value of the house, the state offers what can be a considerable tax break.

The city would offer an additional five percent credit to that amount.

A senior who owns a house assessed at $300,000 will be charged $5,478 in state, county, city and fire taxes. If that person's annual income is $25,000, the state credit will discount the tax bill by $4,248. The city's discount will reduce it by another $212.40.

The state requirements limit an applicant's total assets to $200,000, not including the value of the house and retirement savings and accounts.

Combined annual gross income for the household cannot exceed $60,000.

"I'm not sure how much relief we're going to provide," Alderwoman Marcia Hall said. "Five percent just doesn't seem like very much." City finance director Gerry Kolbfleisch said the program will cost the city several hundred dollars in lost tax revenue.

"I'm not so concerned with loss of income for the city," Alderwoman Donna Kuzemchak said. "At a certain point in time, the money will start coming back." Kuzemchak said she wanted the city to explore the proposal further before the board votes on it. Alderman C. Paul Smith said he thought the asset level was set too high. "If someone is sitting on some assets and they can take care of themselves, I'm not so sympathetic to that," he said.

Sandage, a former member of the Frederick County Commission on Aging, said the asset level is not high enough. She said many seniors supplement meager Social Security and pension payments with savings. But she said the city looking at the issue is a start and she welcomes any help for seniors. "I hope no one feels it is going to eliminate the problem," she said.

Newstex ID: KRTB-0064-27649894