Heading into the 2012 session of the Colorado General Assembly, it looked likely that debate over the state’s budget was going to stall over restoration of the senior property-tax exemption. The exemption, which provides senior citizens who’ve owned and lived in their homes for at least 10 years relief on half of the first $200,000 of their home’s value, had been suspended for the last three years because of the state’s budget difficulties. The suspension, which saved the state $100 million a year, was set to expire in 2012 and the exemption would go back into effect unless legislation was passed that said otherwise.
The impending conflict was set up by the fact that majority Republicans in the House of Representatives said that the state’s budget would not be balanced on the backs of seniors, while Democrats, who controlled the Senate, argued that wealthy seniors shouldn’t get a tax break at the same time that state funding for education was being reduced. While there was conjecture that some kind of middle ground must be found, the fight was averted when increased revenue projections allowed the exemption to be fully funded while still finding additional funds for education.
Meanwhile, the conversations about whether it was good public policy to provide the exemption to all seniors who qualified without regard to need prompted the legislature to pass a bill that directs money from seniors who choose not to take the exemption to other programs to support seniors. However, despite the legislation, Jefferson County Assessor Jim Everson has said that because the exemption is constitutionally based, he does not have the authority to accept taxpayers’ requests to not accept the exemption.
All this conversation points us to the broader conversation we should be having about the entire senior property-tax exemption. It makes no sense to provide property-tax relief to seniors regardless of their circumstances or ability to pay. Additionally, tying the relief to how long a person has lived in a specific property makes little sense either. If seniors need property-tax relief to maintain home ownership, does that need go away just because they move?
It’s high time that we look carefully at the senior homestead property-tax exemption program and come up with necessary changes to ensure that it’s available only to those people who truly need it, that it is available to all seniors for whom it can be justified, regardless of how long they’ve lived in one place, and that tax policy in Colorado doesn’t create market conditions that force people to stay in their homes just to take advantage of the tax break.
Greg Romberg is president of Romberg and Associates, a government relations and public affairs firm. He lives in Evergreen with his wife, Laurie, and three daughters.