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Stafford reinstates tax break for elderly

February 11, 2008 12:16 am

BY KAFIA HOSH

In the fall of 2006, Stafford County officials expanded their tax-relief program to help more residents on fixed incomes.

They increased the limits on net worth for the elderly and disabled so more people could qualify for a real estate tax break.

But as the program expanded, county officials also decreased the maximum tax-relief amount from $3,500 to $2,000.

Suddenly, 140 of the 706 people on the program no longer qualified for complete tax relief, according to Commissioner of the Revenue Scott Mayausky.

"Most of those people had no tax liability up until the time they lowered the cap," he said.

The Board of Supervisors considered raising the cap again recently. Aquia District Supervisor Paul Milde proposed the limit go back up to $3,500.

"I have personally met three people who, up until last year, weren't paying any taxes," he said during a public hearing last month. "They're all widows. And they're all long-time residents."

Last week, supervisors voted 6-1, to increase the cap to $3,000.

Milde actually voted against the increase because it was still $500 less than he wanted.

"We've made a lot of progress. I want it back up to $3,500 where it used to be," he said.

With the cap raised to $3,000, the county will lose about $65,000 in tax revenue each year. And as Stafford faces an estimated $6 million budget shortfall this year, some questioned the fiscal impact of raising the maximum.

"If the real estate tax rate is raised this year, the impact will be more," Hartwood District Supervisor Joe Brito said. "I think we really have to look at the long-term implications of this ordinance."

A $3,500 cap would cost the county an additional $9,000 in tax revenue loss. But about 23 people on the program, who once qualified for a full break, would still have to pay some real estate tax, according to Mayausky.

"The county is not going to feel that $9,000 cost, but those folks who are still having to pay that tax bill, that's real money to them that can create a real hardship," he said.

And although the $3,000 cap is less than the average real estate tax bill, there are still some people in the program whose home values have significantly increased during Stafford's population boom.

"Some of them do have large tax bills, but that doesn't mean they have any more disposable income to spend because of it," Mayau-sky said.

A few years ago, the General Assembly expanded the income requirements for the tax-relief program because of the changing ways baby boomers started to retire.

"So few people have fixed pensions anymore, so they have to have money in the bank to get some sort of monthly return to live off," Mayausky said. "They may have a lot of money in the bank but they're living off the interest."

Tax-relief guidelines in counties such as Prince William and Fairfax do not have a cap, and instead offer different levels of relief based on income and net worth.

Stafford's program is slowly shifting to a similar sliding scale, Mayausky said.

"I think we should keep the program fairly narrow, identify the neediest seniors that we have and provide them as much relief as we possibly can," he said.

But Mayausky warned that as more baby boomers start to retire "we need to be careful that we're not opening up this program where everyone over 65 qualifies. The purpose of the program was to identify the neediest of individuals and help them, not to provide relief to everyone."

Stafford received 706 applications for tax-relief last year, forgiving $1,037,752 in real estate taxes.

Kafia Hosh: 540/735-1977
Email: khosh@freelancestar.com