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Highlands Today

County May Raise Exemption

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By Jim  Konkoly | Highlands Today

Published: February 23, 2008

SEBRING — A low-income, senior citizen with a homestead house gets an extra tax break of $36.77 per year on property taxes under the low-income, senior exemption.

That's based on Highlands County commissioners granting a $5,000 exemption under the "Save Our Seniors" tax break for low-income people age 65 and older.

State law, though, allows counties to set this special exemption anywhere from zero to a maximum exemption of $50,0000 off taxable property value.

At the $50,000 exemption level, the tax savings for the low-income, a senior homeowner with a homestead house would jump tenfold, up to $367.77 per year.

As requested, those figures were provided by Bernis Gainer, director of the county's Office of Budget and Management.

Commissioner Don Bates asked for financial statistics on this tax break so that commissioners can consider the requests to raise this special tax break for low-income senior homeowners.

At the current $5,000 exemption, 1,501 low-income senior households file for this exemption. The cost to the county is $55,155 in lower property tax collections.

At the maximum $50,000 exemption level, the loss in lower property tax collections would be $551,550 per year, according to the OMB.

Commission To Discuss Tax Break

Commissioners are scheduled to discuss, and possibly act on, requests to raise this special exemption for low-income senior homeowners at Tuesday's county commission meeting.

Bates and Commissioner Guy Maxcy said commissioners should seriously consider raising this exemption, which is below what most surrounding counties give.

To make an informed decision, Bates asked the OMB to research how much property tax would be lost if this exemption is raised from $5,000 to $10,000 and then up in $5,000 steps from there to the maximum allowed.

Gainer's memo to commissioners lists the low-income, senior citizen exemptions given by surrounding counties. Compared to the $5,000 in Highlands County, those exemption levels are:

Zero in Charlotte County; $40,000 in DeSoto County, $10,000 in Glades County; $25,000 in Hardee County; $25,000 in Okeechobee County; and $25,000 in Polk County.

The management and budget office provided the per year savings in taxes to low-income senior households and the property tax loss to the county for the following exemption levels:

$5,000 exemption: $36.77 savings per household; tax loss $55,155;

$10,000 exemption: $73.54 savings per household; tax loss $110,310;

$15,000 exemption: $110.31 savings per household; tax loss $165,465;

$20,000 exemption: $147.08 savings per household; tax loss $220,620;

$25,000 exemption: $183.85 savings per household; tax loss $275,775;

$30,000 exemption: $220.62 savings per household; tax loss $330,930;

$35,000 exemption: $257.39 savings per household; tax loss $386,085;

$40,000 exemption: $294.16 savings per household; tax loss $441,240;

$45,000 exemption: $330.94 savings per household; tax loss $496,395; and

$50,000 exemption: $367.70 savings per household; tax loss $551,550.

But Statistics Don't Tell The Whole Story

Tim Mechling, the county's budget manager, helped compile these statistics. He said the true cost to the county cannot be known, because these figures are based on the number of senior low-income households applying for this tax break remaining at the current level of 1,5001.

The higher the exemption goes, Mechling said, the more likely that more income-eligible seniors will apply for this tax break.

"At the current savings of $30-some per year, there probably are some people who don't bother to file for it," Mechling said. "If the exemption is raised to the point where the tax savings is more substantial, more people could be willing to come in and file for it."

Mechling said he has heard some people comment that driving from some parts of the county to the county appraiser's office for the current $36-per-year tax break "isn't worth the cost of gas and their time."

If the tax break is raised to the $25,000 or the $50,000 exemption levels, he said, more people applying for this tax break "is a distinct possibility."

"We have one of the older populations of any county in Florida statistically," Mechling said. "What we don't know is how many of the senior citizen households fall into the low-income category.

"That's the part that we can't determine, that's the part that we can't gauge," he added.

The Save Our Homes special tax break for low-income seniors who own a homestead home was passed statewide as a Florida constitutional amendment. Proponents argued that it would help low-income seniors stay in their homes and keep up with inflation.

The current legal definition of low-income status for a senior household, no matter how many people are living in it, is a total annual income of $24,916 per year.

According to the budget office, the 1,501 senior households which get the low-income tax break account for about 6 percent of the county's 25,560 homestead households.

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