Former Irving mayor promotes seniors shifting property tax burden to non-seniors (TX)

Former Irving Mayor Herbert Gears, again running for mayor, is urging seniors’ use of a little-known Texas state law to stop paying taxes on their homes and thereby shift new tax burdens to non-seniors.

Akin to Obamacare being a program based on the young and healthy financing the health care of the old and poor, this agism bent to wealth redistribution whereby healthy, non-senior taxpayers are left picking up the tab for seniors is a trend threatening any hope of future prosperity for younger Americans. While it demonstrates Texas’ critical need for property tax reform, it also serves as one more unsustainable public policy course that should motivate political engagement like never before.

While a defender of neither taxes that too often are excessive and irresponsibly used nor of the entities who push for them, today’s trend of enjoying taxpayer-funded benefits only to defer the costs to other people including future generations is problematic in its own right.

The degree of seniors who would actually utilize the law promoted by Gears remains to be seen, but Irving officials are understandably concerned as seniors are unlikely to stop consuming government services and tax dollars are still needed for legitimate city infrastructure.

Gears is specifically proposing seniors’ use of a 1979 Texas law that, with submission of a simple affidavit, allows deferred property tax collection for homeowners who are 65 years or older or are disabled. The deferral stands until the person no longer owns and occupies the home as a residence. The payment of taxes is not eliminated, only postponed. Property taxes continue to accrue and though they are assessed an additional 8 percent annual interest, no other delinquent penalty charges are included.

Upon death, the deferral can pass to a surviving spouse who is 55 years or older, owns the residence and occupied it at the time of death. When the property is sold or ownership transferred, the spouse or other heirs must pay the accrued taxes and interest within 180 days.

Qualified homeowners across Texas can take such a deferment. Imagine the implications if residents of Georgetown’s Sun City community organized and en masse decided to take such action. The impact this could have on non-senior residents of Williamson County, the city of Georgetown and Georgetown ISD would be stunning.

The Dallas Morning News reports that Irving officials are concerned this movement could affect several city-subsidized high-income housing projects. Because of these projects, Irving taxpayers have real estate development liability and are on the hook for $30 million. The city’s plan that buyers of the new homes would pay the money back over time, in part through property taxes, could be derailed if tax-exempt seniors become a major segment of the projects’ buyers.

These type measures do impact tax revenues and government operations. On top of this deferral, it’s important to remember how voters in 2003 overwhelmingly approved constitutional amendments that authorized a local option to cap residential property tax bills for the disabled, the elderly and their spouses. That same round of amendments also prohibited increasing the school taxes of a disabled person. By 2010, though some taxing entities reported little or no difference with the provisions, others reported quite differently and expressed major concerns for the future.

America’s demographics are rapidly changing. Baby Boomers are turning 65 at a rate of 10,000 per day, a trend that will continue for another 16 or so years.

New records were set in 2013 as nearly 11 million people – more than the population of Greece – now receive federal disability benefits. With more than half of claims based on mood disorders or musculoskeletal problems, today’s disability beneficiary pool now also includes more non-seniors.

Texas’ local government debt sits at $322 billion, a debt level second only in total debt to California and second only to New York in per capita debt. With their property taxes frozen, seniors already can and often do vote in favor of new bond debt knowing it won’t be theirs to pay. Entities (school districts, cities, counties, etc.) across Texas are seeking another $6.5 billion in new bond debt ($9 billion when factoring interest) with the upcoming May 10 election.

With tax burdens growing, Gears’ tax deferment advocacy is something to watch. Government is a monkey-see, monkey-do culture. If other candidates see success with this tactic, it will be seen in other areas.

Examination of discriminatory tax policy is not about picking on one group or another. It’s about taking a practical look at who is being expected to take on greater burden, their capacity to pay and the consequences of these expectations.

Whether voters – particularly the healthy of younger ages – realize what could be coming their way is unknown. But in reality, they can’t afford not to.

Lou Ann Anderson is an information activist and the editor of Watchdog Wire – Texas. As also a contributor at Raging Elephants Radio and News Radio 1400 KTEM, she writes and speaks on a variety of public policy topics. Lou Ann is the creator and online producer at Estate of Denial®, a website that addresses probate abuse via wills, trusts, guardianships and powers of attorney as well as other taxpayer advocacy issues.

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