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Council set to discuss hike for seniors’ tax exemption, may put off action

Thursday, March 20, 2014 by Michael Kanin

Two, and possibly three, Austin City Council members appear willing to postpone approval of an increase in the property tax exemption for Austin residents who are 65 and older. The item is currently set for action as part of Council’s today’s agenda.


Council Member Mike Martinez, who was careful to give his staff credit for the find, laid out his concerns at Tuesday’s Council work session. “I was looking at (raising the exemption level to) $60,000, just because it’s a one-and-a-half million (dollar) hit, probably can be found in next year’s budget, and then looking at the five year estimated cost – it’s not insignificant, it rises to $7.6 million,” he began. “One of my staff members said on an annualized basis, at $60,000 you save an over-65/disabled individual $45.24 a year.


“What would the impact of increasing funding to an organization like Meals on Wheels by $1.5 million, adding those free meals to the elderly and disabled – what would the financial impact be to those individuals and how much would they save in food?”


Council Member Bill Spelman joined him. “I’m really happy to hear Council Member Martinez’ discussion of this because I think that’s exactly the right way to think about it,” he said.


Though she did not offer specific support for a postponement, Mayor Pro Tem Sheryl Cole also expressed some concerns about the item. She noted that, though the 65-plus community represents the community of greatest need with regard to tax relief, she felt that Spelman raised some interesting points.


Meanwhile, Council Member Laura Morrison continued to signal her desire to have a discussion about the potential increase in exemption at today’s meeting. She also urged he colleagues to get behind the new exemption, suggesting that it would present them with a tool to fight ever-increasing costs of living in Austin.


The city currently offers homeowners who are 65 and older a $51,000 exemption on their property tax bills. That figure has been steady since 1986. In a February memo, staff explored the projected tax impact of raising the exemption amount by between $1,000 and $49,000.


For each $10,000 in additional exemption offered, the city projects an additional $3.50 worth of impact on the median homeowner’s property tax bill. That figure could have a substantial impact on city coffers if the region’s 65-plus population continues to increase.


Unlike Travis County, the City of Austin does not offer its residents a blanket 20 percent homestead exemption. Morrison carefully proposed the city’s position on the possibility of such an exemption as “we support a change to the state law that would allow us to make a fixed exemption city-wide for all property owners.”


For his part, Spelman has also expressed concern about the notion that an increase in the 65-plus exemption could misfire, resulting in increases to rents across the city.


Martinez suggested that the Council’s Health and Human Services Committee – a body that includes both he and Morrison – take up the issue.

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