New Haven Independent

Posted by: Cedar Hill Resident | February 6, 2007 3:55 PM

I am glad to see they are protecting the seniors. But when they did the reassesments I thought they said that the change in the mill rate will even it out so that the tax increase would be minor if at all??? Now I am confused??

On a personal note:
Emidio Cavaliere wow a face from my childhood I was in his store 3 times a day growing up what a great face to see!!

Posted by: elmcityview | February 6, 2007 5:37 PM

At first pass, freezing taxes and related accounting shuffles/deferrals seems great and progressive right? Who wouldn't want their taxes frozen, and what better group to freeze taxes for than seniors? The problem with this is that it unfair, anti-democratic and punitive to people who are new homeowners or who want to become homeowners.

How about freezing property taxes for single mothers, people with physical/emotional disabilities, parents of school aged children, young single urban professionals, first-time homebuyers, everybody earning under $50,000/year? -- the list goes on and on of classes of people who could use tax breaks.

The point with property taxes is that it's a burden that is equally shared. Income-tested formulas like this tied to senior ship status is unfair and punitive to non-seniors who are increasingly (will be increasingly) contributing a larger portion of their pay checks to subsidize federal entitlement programs (medicare, social security, etc) for seniors.

Many seniors are income poor (meaning they technically don't make more than $50,000/year in retirement), but asset rich (unlike many working class folks and professionals who are often times debt rich and asset poor). Why should working and professional on-seniors subsidize seniors' property assets?

In a scenario that is happening more frequently where empty nesters are retiring their suburban homes and moving to the city purchasing downtown homes and condos for $500,000 and millions, why should folks like this who may be able to technically generate less than $50,000 a year on paper in their retirement, pay less than a professional working scrimping and saving to purchase a home on which she'll have to pay full taxes. It doesn't make sense, and is punitive and unfair.

If the reasoning behind this is that seniors are a privileged class, we may just find that new haven (in it's explicit attempt to lure young urban professionals which this policy works against), ends up creating a city expanding in its population of empty nesters and seniors who can afford the tax break.

If the city wants to use age to play games with taxes, you may just find a young professional or two keeping the title to their homes in their parents' names to avoid the tax -- which wouldn't be right (though fiscally smart) either.

If the thought is we should all pay in at the rate we consume, then we should charge more taxes to parents with children in public schools, those who consume city social services more (many of these seniors) and reimburse or give tax breaks to young urban professionals without school-aged children and who consume few city services --- all of these suggestions of course would be wrong.

Tax burden should be shared equally and democratically. This policy is built on a slippery and ill-advised slope. Don't penalize and make people trying to attempt homeownership for the first time, be the one's who pay the more than their fair share as a citizen in this great city. It's well-intentioned but ill-advised. Good heart the city has, but the real solution is lowering the taxes for everyone --- and soon!

Posted by: alternative | February 7, 2007 12:20 PM

While seniors are suffering due to tax increases, so is everyone else and elmcityview makes all the right points.

Two options. One; absentee owners that recieve very good rents in some of the poorest neighborhoods, and keep the houses in bad shape to get the lowest possible assessment, thus the lowest taxes should pay an additional mil rate. Many of these neighborhoods have high service demands for schools, police and emergency services. The owners make very handsome cash flows out of these houses and apartments. Many were purchase years ago, for very little money. Remember when you could buy a multi-family in Newhallville, the Hill or Fair Haven for under $70,000. Then collect rents that in many cases exceed $800/month for 2 bedrooms, and approach $1,000 for 3 or 4 bedrooms. At 10% over 30 yrs., that's only a mortgage payment of $615 a month, when income from the house may be close to, or over $2,000 per month. The owners make thousands live outside of New Haven and pay the lowest taxes. We know this is an issue, because the city has acknowledge the concerns thru actions of LCI. As for the arguement that this is punishing the poor. I believe this will not punish the poor. Many of these rents are subsidized, and the owners won't raise rents if the house becomes vacant. If rents are raised, then the burden is passed along via State aid. We could have had an idea like this introduced at the State level, since most urban areas have the same situation. A few additional mils, wouldn't cause all the owners to sell. The houses are way to profitable.

Second; Create a municipal bond system similar to a reverse equity mortgage, where assest wealth is used to keep the city rolling, and fixed income in the pockets of the owners. Seniors with income limits, but little or no debt on their houses could use the bond program for say ten years or until sale or other type of transfer. Bonds would be rated and sold at a discount, and on municipal bonds are not subject to income tax. making them a solid investment. I am no bond expert, but I doubt it has been considered, even if it can't be done it wold be worth a look. Or why not work with local backs to create a reverse-equity mortgage program that doesn't take advantage of people,like most of the current ones. Then educate the seniors and their families, who are typically very confused by the nature of a program like this.

The median income in this city is less than $34,000, so this is only going to hurt most residents.

I hate to say it but failed leadership, not paying attention to this issue for three years while running for gov., using the city funded staff for the campaign are reasons these last minute not clearly thought out plans get tossed up. There was little or no research done on this topic, and few meetings to have possible options put on the table when the time was available.

What happened to increasing the veterans benefits?

Explain where the budget cuts are coming from. There was no room for cuts last year, and the Finance Committee worked very hard to find any they could. What's different this year? The hole in the budget is certainly not smaller.

Posted by: Jay | February 7, 2007 2:52 PM

Seniors often suffer more because their houses have appreciated so much since they were purchased. There is a big difference in the financial consequences to a familly who bought their house for $300,000 two years ago, and one who paid $20,000 forty years ago but now have an assesed value of $300,000. Unless seniors sell their homes, they are only burdened by the increased value. The ability to defer their taxes untill the property is sold will help many seniors from losing their life long homes.

Posted by: elmcityview | February 7, 2007 3:49 PM

Jay, the impact of a $20,000 house purchased 40 years ago that is valued now at $300,000 is called market appreciation. Generally speaking cities work to create conditions so that people's investments in their homes appreciate rather than decrease (this of course takes into consideration real-estate cycles). Should non-seniors, working families, single mothers, and other deserving folks subsidize the appreciation of seniors' home values? No. Doing so would be a market inefficiency.

One can not expect to have her taxes frozen at the value at which she purchased a home 40 years ago, for tax assessment purposes when the cost to the city to service that same home 40 years later has risen substantially. Freezing assessments for seniors based on a sales prices 40 years prior makes as much sense as limiting today's sale prices of homes purchased 40 years ago to the market market of 40 years ago. One can't have her cake and eat it too.

ALTERNATIVE provides some innovative ideas solutions that are along the direction the city should be exploring rather tampering with the real estate market. This city's current plan would have long lasting impacts that would affect home sales for decades to come.

Posted by: Ned | February 8, 2007 8:21 AM

That's forty years they could have been voting for politicians who weren't going to tax them out of their homes...