Taxes are a fact of life, and the financial projections in this year’s Annual Town Meeting booklet show they are bound to rise over the next five years, driven by a steady increase in the cost of town services and new debt, such as the principal and interest that would be required to pay for the hotly debated $54 million elementary school building project. For seniors on a fixed income, rising property taxes eat into money they need for other expenses.
Articles 39 and 40 of the 2018 Town Meeting warrant, if approved, will offer Harvard seniors two means to seek relief. Article 39 would establish a means-tested senior citizen property tax exemption that would reduce the taxes owed by qualified seniors by a maximum of 50 percent of what they owe in a given year. The relief would be paid for by an increase in the taxes paid by everyone else, and the total amount made available by the town would be capped.
Article 40 would increase the number of seniors eligible to defer payment of their property taxes, doing so by raising the maximum income allowed to qualify to $57,000.
Both articles will be taken up during the afternoon session of Saturday’s meeting. Both have been recommended by the Finance Committee, which has taken the position that it wants to support seniors who wish to remain in town. Both require a majority vote to pass, but Article 39 would create a new town bylaw and, because it is a home-rule petition, must be approved by the state Legislature and then approved by a majority of voters at the next Harvard Town Election.
To qualify for the senior tax exemption proposed in Article 39, a resident must be at least 65 years old and have lived in town 10 consecutive years. Married seniors would be required to apply jointly; one must be 65 or older, while the spouse must be at least 60. A number of additional criteria would be used to determine who is eligible, including income and property value limits.
The proposed bylaw is the work of Selectman Stu Sklar and Finance Committee associate member Jennifer Finch. It would cap the property tax of a qualifying senior or couple at 50 percent of the amount owed in a given year. The bylaw would require an applicant to first qualify for the state senior circuit breaker and to submit federal and state tax returns. Applications would be approved by the Harvard Elderly and Disabled Tax Aid Committee. The amount of the exemption would be limited only by the total amount of the annual levy the town agreed to make available. If requests exceeded that amount, the exemption awarded each qualifying senior taxpayer would be reduced.
Making up lost revenue
To make up for tax revenue lost to senior tax relief, the rest of Harvard’s homeowners would need to pick up the slack. The Sklar-Finch plan would cap the town’s first-year contribution at 0.5 percent of the previous year’s levy. Over time the selectmen could increase the amount to 1 percent. By studying the town of Sudbury’s experience, Sklar estimates that of the 2,300 homes in Harvard, 50 to 100 might qualify for the exemption, adding about $53 to the tax bill for a $629,155 residence, the average assessed value of Harvard houses. Higher value homes would see larger increases. Sklar and Finch’s back-of-the-envelope estimate is that the program would cost nonexempted taxpayers an additional $100,000 to $120,000 in the first year.
Concern for oldest seniors
Sklar and Finch have told the Press they are especially concerned for Harvard’s oldest seniors, those who moved to town 30 years or more ago and have seen large increases in the assessed values of their homes. They must pay for health care and drugs and the expense of daily living whose costs continue to rise, Sklar said. Should Town Meeting approve construction of a new school, these elders will see a dramatic increase in their annual property taxes.
Sklar notes that the bylaw allows for a three-year trial as an experiment. After that, it would expire but could then be made permanent by a majority vote at Town Election.
Editor’s note: Portions of this article appeared in the Feb. 1 edition of the Press.
