Haslam eyes cut to state’s property tax relief program for low-income elderly, disabled and veterans

The Haslam administration is eying an across-the-board cut in funding for the state’s Property Tax Relief Program, which is open to the elderly, disabled and veterans making less than $28,000 per year. The Chattanooga Times-Free Press reports some county officials are pushing to avoid any reduction or, if it comes, to cut the veterans’ tax credits more than those for the elderly and disabled.

Gov. Bill Haslam has discussed plans to slash funding for the program next year from $33 million to $29 million, leaving the more than 150,000 poor and disabled enrollees to shoulder more of their property tax bills.

Hamilton County Trustee Bill Hullander said he and trustees from Davidson, Shelby, Rutherford and Anderson counties are working on a plan to get the program fully funded, or to reduce tax credits for veterans.

“It’s a good program for the elderly and veterans,” Hullander said. “However, [in Hamilton County] the veterans make up 9 percent of the people who participate in this program but they are getting 46 percent of the money.”

That’s because the benefit thresholds are a bit lopsided.

The low-income elderly and disabled get tax relief for the first $25,000 of their appraised property. But disabled veterans get relief on the first $175,000 of theirs.

On average, that means seniors get $150 knocked off their property tax bills for the year. But the average tax credit for a disabled veteran is about $750.

…In 2013, there were 133,511 low-income elderly or disabled participants, or 89 percent of the people on the program, according to state comptroller records. They received just over $19.7 million, or 64 percent, of the total pie. The 16,888 disabled veterans and widows represented 11 percent of participants but got 36 percent of the benefits, or $11.3 million.

John Dunn, spokesman for State Comptroller Justin Wilson, said the Haslam administration is not looking to cut anyone out of the program. Instead, everyone’s relief will be prorated, he said.
The goal is to bring the program’s budget back down to 2013 levels.

In 2010, the program’s appropriation was $25 million. But as more residents enrolled, the allocation grew to $28 million in 2012 and $33 million in 2014.
“What’s happened over the years is more and more money is being allocated to support the full funding of this program,” Dunn said. “The administration is looking for other ways to provide tax relief.”

But the whole issue has become a political football, and few people want to play.

Hullander said the administration is looking to a group of five trustees to make the decisions.

“We feel like they are trying to put pressure on us, so they can say, ‘No, it was those trustees that made those changes to the veterans’ benefits,'” he said. “If we don’t come up with something, they are going to cut 14 percent on everything. That means little Ms. Jones down the street is going to get less, and we don’t think that’s fair.”

By the end of February, the trustees will have a plan to present to the General Assembly. But Hullander said it’s going to be up to legislators to make decisions.

“We will just present facts to them and let them decide what to do,” Hullander said.