New Haven Independent

The tax plan pushed forward Monday night mimics the original plan proposed by the mayor, which gained support at this public hearing. But it caps the benefit at $2,000. The item was released without a vote from the aldermanic Finance Committee, then sped along to the full Board of Aldermen, set for a final vote on Monday.

A half-dozen seniors returned before the Finance Committee Monday to plead for tax relief.

Irma Burns, who has lived in her East Shore home for 50 years, said she’s daunted by the prospect of taxes increasing every year. “We’ve taken care of our property — it’s almost like we’re being punished.” She urged support for the tax relief plan: “I hope that you will think about it, and help us.”

Younger taxpayers such as Gary Doyens (pictured) protested the shift in the tax burden: The plan would result in an estimated $1.2 million loss of tax revenue, which other taxpayers will inevitably have to make up for.

The city should provide “real” tax relief by reining in its budget, argued Doyens. The mayor’s proposed $445.2 budget represents a roughly 7 percent increase over the initial approved budget for FY06-07 — an addition of $29.5 million. (Click here to download the mayor’s proposal.)

“I urge this committee and this board to put the brakes on this mayor,” Doyens said.

The tax relief applies to homeowners over 70 years old who’ve been living in New Haven for at least 10 years. Those making less than $50,000 per year would have their tax payments frozen at current (FY06-07) rates. Those making $50,000 to $70,000 would have their tax frozen, with additional tax payments deferred until they sell their home.

Benefit Cap

One recent amendment makes the plan not technically a tax “freeze”: The benefit is capped at $2,000.

So if, for example, by year four of the city’s phase-in of property revaluations, someone’s taxes end up increasing by $2,500 from the amount they paid in 2006, the homeowner would be required to pay the overage of $500.

Why throw in the benefit cap? “To get a measure in place from the beginning to make it manageable in the long term,” said Chief Administrative Officer Rob Smuts.

City number-crunchers estimate the city would lose $1.2 million in tax revenue this year, but numbers depend on how many seniors actually file. Subsequent years are harder to predict, say staff.

Don Dimenstein, New Haven’s former director of elderly services (pictured at top of the story), supported the proposal but scrutinized the tax deferral portion. Homeowners in the higher tax bracket will owe the city a deferred tax payment, with accrued interest yearly according to federal interest rates, out of the proceeds of the sale of their home after they die.

“These deferrals can add up,” cautioned Dimenstein. “I think the interest ought to be absorbed by the buyer.”