Loudoun Supervisors Take Another Look at Elderly and Disabled Tax Relief

Supervisors have tried for years to improve the county’s system of real estate tax relief for elderly and disabled people, but have so far been unable to agree to a solution. Now, the county board is moving forward with its latest attempt.

They have worried for years that the way the county provides that tax relief now is unfair, because it weighs a person’s net worth. To qualify for tax relief, a person must be 65 years or older or permanently disabled; their gross household income, not including disability payments or a part of their spouse’s income, must not be more than $72,000; and except for their house, a person and their spouse’s net worth cannot exceed $440,000.

A person who meets those criteria are eligible for a pass on their real estate tax.

But supervisors worry that works against people who have saved for retirement. A person’s retirement savings could disqualify them, while a person with more monthly income and a pension would still qualify.

The newest proposal, this time prepared by county staff, expands upon the existing program. It sets up four more brackets for tax relief, each getting 50 percent relief, based on a sliding scale of income versus net worth.

Taxpayers would be eligible to pay half as much on their real estate tax bill if they earn up to $65,000 with $560,000 net worth; $59,000 with $680,000 net worth; $52,000 with $800,000 net worth; or $46,000 with $920,000 net worth.

That scale is based on the total income a household would get if they converted all of their net worth into an annuity, bringing in $5,400 annually per $100,000 invested. And it was meant to be a simpler solution to a complex problem.

“As you try to make the program more equitable, more fair, in more ways, you also invariably make it more complicated and difficult to administer and for the public to understand,” said Doug Kinney, an economist with the county Department of Management and Budget. He said this model is a commonly used device in measuring a household’s financial status.

Based on limited data, county staff have estimated the county could forfeit $1.2 million to $2.7 million in tax revenue, on top of the $8.3 million in real estate tax the program already forgives.

Like all previous plans, supervisors viewed this one as an imperfect improvement.

“I wish it wasn’t 100 percent or 50 percent,” said Supervisor Ron A. Meyer Jr. (R-Broad Run). “I still think if you live here and own, you should be paying some level of taxes, even if you get 75 percent relief. But this is the cards that this board’s been dealt from the last board, so I think this is an improvement.”

And Supervisor Geary M. Higgins (R-Catoctin) said it leaves out some people.

“If I have a farm that’s worth a million bucks, that I’m busting my chops on to earn $72,000… that farm throws me out of this tax relief, because that basically is my way of earning income,” Higgins said.

But only Supervisor Matthew F. Letourneau (R-Dulles) outright opposed the idea, which he said expands the tax relief system instead of fixing it.

“I think all we’ve done is expand the program, and this is income redistribution,” Letourneau said. “This is just massive income redistribution, where everybody else in the county now will be paying more—$11 million total for the program, that’s over a cent in our tax rate now—that everyone else will be paying because we’re now giving a subsidy to other people.”

County staff have recommended phasing the program in, since data on its impacts are limited, to avoid any unexpected shock to county revenues. Supervisor Ralph M. Buona (R-Ashburn), who along with Supervisor Suzanne M. Volpe (R-Algonkian) has pushed for tax relief for the elderly and disabled since the previous board, said the new tax relief plan is about “fairness” and is “the right thing to do.”

“The impact isn’t that large, the number of people isn’t that large,” Buona said. “This isn’t wealth redistribution. This is helping out elderly people and disabled people, correcting an inequity.”

Supervisors voted 8-1, Letourneau opposed, to draft a revision to the county tax code and hold a public hearing, which is not yet scheduled.

rgreene@loudounnow.com
@RenssGreene

2 thoughts on “Loudoun Supervisors Take Another Look at Elderly and Disabled Tax Relief

  • 2017-11-13 at 4:14 pm
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    It’s a noble idea, but I don’t understand why Ralph Buona calls this an “inequity.” It’s taxes, everyone has to pay them. It’s a noble idea to help our elderly out, but now the inequity is that the rest of us pick up a few cents in taxes. As for farmers — there’s what, maybe 100 of them in the County? When will we stop using farmers as a prop? And they’re a prop to keep us afraid of them developing their land? The other group — easter retirees with a huge retirement plan, they shouldn’t need the rest of us to subsidize them, and if they don’t like the tax burden, do what a lot of other retired people with freedom to move do, Move.

    Here’s an idea — use Transfer of Development rights programs like Montgomery county has so developers buy the density off of these farmers, taxpayers don’t end up subsidizing them, taxpayers aren’t nailed with an ugly looking set of bills when these farms are developed by-right (gonna happen one day….) and the density ends up close to the Metro stations.

  • 2017-11-23 at 11:20 am
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    I’m very disappointed in Loudoun county supervisors. There seems to be a total disregard for those seniors trying to manage on a shoestring budget. Are you aware that the baby boomers now retiring at a rapid pace, most who have worked at companies with NO pensions, are dependent to a large degree on social security? The maximum social security income before taxes is about $2600 / month. So a senior making less than $52,000 a year under the new proposed plan will have to pay 50% taxes rather than 0%? Am I reading this correctly?

    If a senior scaled down and lives in a small condo (around here that’s about $400k!) and is barely able to pay bills at an income of $32k per year, now will have to pay about $200 a month more for taxes (that may not even be deductible under the new tax plan) while the ‘wealthier’ are getting tax breaks that did not exist before. Am I understanding this correctly? This sure sounds like take from the poor to give to the rich. Where else have I heard this plan recently?

    For me, I planned my retirement carefully and 5 years ago moved from Reston to Loudoun county in anticipation of being able to take the100% tax benefit. I retired a few months ago and work part time now. The move was so I could afford to stay in the area close to my only daughter and still be able to afford to be independent. But by reducing the benefit from 100% to 50% at my new low retirement income will mean I will have to either go back to work full time (at my age and health) or move far away from my only family. How sad that Loudoun has taken up the same thinking that our other Republican leaders in government have; more for the rich, less for the middle class and lower income. After working for 40 years (at a woman’s reduced salary, yes it’s true), never at a company with a pension, and as a single mother since my daughter was 8, my nest egg is not anywhere near what evidently the rest of the county must have. By reducing the benefit I will no longer be able to live in Northern Virginia. Are you proud to be in the richest county in the country? Shame on you for lacking any Christian morals.

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