Article 2 Motion For Tuesday's Special Town Meeting

Article 2 - Motion 

            Move that the Town of Sudbury petition the General Court of the Commonwealth of Massachusetts to enact special legislation as follows:

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same as follows:

SECTION 1.   With respect to each qualifying parcel of real property classified as class one, residential in the town of Sudbury there shall be a cap on property taxes equal to the sum of [1] 10 per cent of the total annual household income, and [2] the amount of the state’s “circuit breaker” credit the applicant was eligible to receive in the year prior to the application being filed, except that if the cap described in Section 3 is exceeded by a higher percentage and except that in no event shall property taxes be reduced by more than 50 per cent by this exemption. The exemption shall be applied only to the principal residence of a taxpayer as used by the taxpayer for income tax purposes.

SECTION 2.   The board of assessors may deny an application if they find the applicant has excessive assets that place them outside of the intended recipients of the senior exemption created by this act.  Real property shall qualify for the exemption set forth in section 1 if all the following criteria are met:

(a) the qualifying real estate is owned and occupied by a person or family where their prior year’s income would make them income eligible for the Circuit Breaker income tax credit;
(b) the qualifying real estate is owned by a single applicant age 65 or above at the close of the previous year or if a joint application the second applicant was age 60 or above;
(c) the qualifying real estate is owned and occupied by the applicant or joint applicants as their principal residence for income tax purposes;
(d) the applicant or at least one of the joint applicants has resided in the town of Sudbury for at least 10 consecutive years before filing an application for the exemption; 
(e) the maximum assessed value of the primary residence is no greater than the prior year’s average assessed value of a Sudbury single family residence plus 10 percent; and

(f) the board of assessors has approved the application.

SECTION 3.   The exemption provided for in this act is a shifting in the tax burden among residential properties much like the residential exemption provided for in the general laws. This exemption shall be in addition to any other exemption allowable under the General Laws, except that there shall be a dollar cap on all the exemptions granted by this act equal to 0.50% of the fiscal year’s total residential property tax levy for Sudbury including the levy for the regional high school if not included in Sudbury’s tax levy at some subsequent date. After the first year of enactment, the total cap on the exemptions granted by this act shall be set annually by the board of selectmen within a range of 0.50% and 1.00% of the residential property tax levy for Sudbury including the levy for the regional high school.  In the event that benefits to the applicants must be limited because the percentage established annually by the selectmen would otherwise be exceeded, the benefits shall be allocated by establishing a higher percentage in Section 1 as necessary to not exceed the cap. In the event the cap exceeds the need the burden shift shall be reduced to meet the need.

SECTION 4.   A person who seeks to qualify for this exemption shall, before the deadline established by the board of assessors, file an application, on a form to be adopted by the board of assessors, with the supporting documentation of their income and assets as described in the application.  The application shall be filed each year for which the applicant seeks the exemption.

SECTION 5.   For the purposes of this act, "parcel" shall be a unit of real property as defined by the assessors in accordance with the deed for the property and shall include a condominium unit.

SECTION 6.   Acceptance of this act by the town of Sudbury shall be by an affirmative vote of a majority of the voters at any regular or special election at which the question of acceptance is placed on the ballot. This act shall become effective on the thirtieth day following an affirmative vote.

SECTION 7.   The acceptance of this act may be revoked by an affirmative vote of a majority of the voters at any regular or special town election held prior to affirmation at which the question of revocation has been placed on the ballot by a two-thirds vote of then sitting members of the board of selectmen. Revocation of this act shall become effective on the thirtieth day following that affirmative vote and shall thereafter apply only for applications received following revocation. 

SECTION 8.   Acceptance of this act by the town of Sudbury shall automatically expire after 3 years unless reaffirmed by the affirmative vote of a majority of the voters at a town meeting.  Once reaffirmed, it shall take an affirmative vote by two-thirds of the voters at a regular or special election at which the question of revocation has been placed on the ballot by a two-thirds vote of then sitting members of the board of selectmen for this act to be revoked.

SECTION 9.   The selectmen and/or the board of assessors may make technical and procedural changes, if they decide such changes will:  (1) make the administration of the act more efficient, (2) make it easier to comply with the regulations of the Massachusetts Department of Revenue, or (3) for any other good reason.  Such changes shall not require further approval by the legislature.

Data of Sudbury's State Circuit Breaker Filers from the Mass Dept of Revenue

Q & A on Sudbury Article 2

Q. What will Article 2 do if it gets all its approvals?

A. It will create a fund of about $330-350,000.

Q. How will it do that?

A. It will increase everyone’s property taxes by one-half of one per-cent. If your tax bill would have been $10,000 it will be $10,050.

Q. Where does the money go?

A. It will reduce the property taxes on needy Senior Citizen.

Q. How many of them are there?

A. About 250, maybe 300.

Q. How do we know which are needy?

A. According to the new census data, there are 1,188 families in Sudbury with one or more people 65 or older; there are 1,243 individuals collecting Social Security and there are a total of 2,031 individuals age 65 or older, 1,254 of them over 75. The needy ones are those whose income would make them qualify for the State Circuit-breaker Credit.

Q. Again, who are they?

A. Their income is no more than $51,000 if single, $77,000 for a couple. In 2008 (latest available) there were 204 who claimed the credit, and we think that if Article 2 passes the total who will qualify will be closer to 250.

Q. So, about 20% of the Senior Families in Town will qualify? What about the rest?

A. They’ll pay the extra 0.5% just like the rest of the taxpayers.


Q. That’s it?

A. No, in order to qualify you have to meet a lot of criteria; you have to be over 65, you have to have lived in Town for 10 years, and your house can’t be too expensive. There may be an “asset test” to be sure you don’t have a hidden nest-egg.

Q. Then What?

A. Then, the Assessors compare your taxes to your income. The goal is to make sure your taxes aren’t more than 10% of your income.

Q. Isn’t that what the State Circuit-breaker is supposed to do?

A. Yes, and in many town it may do it, but our taxes are so high that for a lot of people that doesn’t do it.

Q. So what does Article 2 do?

A. It does a calculation, like this simple example:

House assessed at $350,000, taxes are about $6,000

Income is $30,000, so tax shouldn’t exceed 3,000

Extra tax burden is $3,000

Taxpayer earns Circuit-breaker of about $1,000

Taxes still exceed 10% of income by $2,000

That $2,000 is the amount that qualifies for the Article 2 exemption


Q. So the property tax is reduced by $2,000, to a total of $3,000?

A. Maybe, remember, there’s a $330,000 fund that was created. The assessors add up all the claims, like this one. If they total less than $330,000 the taxpayer will get a $2,000 exemption. But that isn’t likely.

Q. What is likely?

A. It’s likely that the claims will exceed the amount available, and so the funds will be distributed according to a very fair formula.

Q. That’s it? What has to happen to make this possible?

A. First, this Town Meeting has to approve. Then it goes to the legislature.

Q. Isn’t that a death-knell? I heard they don’t pass anything like this.

A. Not any more. We’re doing this because this year the Town of Hamilton passed an article very much like this one, and it has now become law. This article is based on the Hamilton article, which is one reason it’s so complicated. This Q&A is a very simplified version. We believe the legislature will approve, if it passes Town Meeting and the Town officials support it when it is heard by the Legislature.

Q. And then?

A. The Governor has to sign it, and send it back to Sudbury. Then we have to have an election and the voters have to approve it.

Q. And then?

A. That’s it. It will take about two years. Then the assessors will prepare forms and Senior Taxpayers can apply for the exemption.

Sudbury Special Town Meeting Article 2 in the Warrant

Home Rule Petition  - Senior Citizen Means Tested Property Tax Exemption

            To see if the Town will vote to petition the General Court of the Commonwealth of Massachusetts to enact special legislation as follows:

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same as follows:

SECTION 1.   With respect to each qualifying parcel of real property classified as class one, residential in the town of Sudbury there shall be a cap on property taxes equal to 10 per cent of the total annual household income, except that if the cap described in Section 3 is exceeded by a higher percentage and except that in no event shall property taxes be reduced by more than 50 per cent of the tax due, including all tax abatements and exemptions, but excluding state circuit breakers. The exemption shall be applied only to the principal residence of a taxpayer as used by the taxpayer for income tax purposes.

SECTION 2.   Real property shall qualify for the exemption set forth in section 1 if all the following criteria are met:

(a) the qualifying real estate is owned and occupied by a person or family where the total annual household income shall not exceed the following: single applicant $51,000; single head of household applicant $64,000 married applicant filing jointly $77,000;
(b) the qualifying if the real estate is owned by a single applicant having reached age 65 at the close of the previous tax year of if a joint application the real estate is owned by the joint applicants at least one of said joint applicants must have reached age 65 and the other reached age 60 at the close of the previous tax year;
(c) the qualifying real estate is owned and occupied by the applicant or joint applicants at least 6 months plus 1 day each year;
(d) the applicant or at least one of the joint applicants has resided in the town of Sudbury for at least 10 consecutive years before filing an application for the exemption; and
(e) the maximum assessed value of the applicant's or joint applicant’s primary residence is no greater than the average assessed value of a single family residence in the town of Sudbury plus 10 per cent, as measured for the tax year immediately previous to the tax year for which the application for exemption is filed.

SECTION 3.   The exemption provided for in this act shall be in addition to any other exemption allowable under the General Laws, except that there shall be a dollar cap on all the exemptions granted by this act equal to 0.50% of the previous fiscal year’s total tax levy for Sudbury including the levy for the regional high school if not included in Sudbury’s tax levy at some subsequent date. After the first year of enactment, the total cap on the exemptions granted by this act, shall be set annually by the board of selectmen within a range of 0.50% and 1.00% of the previous fiscal year’s total tax levy for Sudbury including the levy for the regional high school.  In the event that benefits to the applicants must be limited because the percentage of the levy as established annually by the selectmen would otherwise be exceeded, the benefits shall be allocated by establishing a higher than 10% of annual income paid in property tax as required to not exceed the 0.5% to 1.0% cap on total exemptions from this act.

SECTION 4.   A person who seeks to qualify for this exemption shall file with the board of assessors an application for abatement on a form to be adopted by the board of assessors and available at the assessor's office with the supporting documentation as described in the application. The application shall be filed by January 31 each year for which the applicant seeks the exemption for the fiscal year commencing the following July 1, except that for the first year following adoption, the board of assessors shall set the deadline in a manner that provides at least 60-days in which to apply for the fiscal year that begins following the act becoming effective.

SECTION 5.   For the purposes of this act, "parcel" shall be a unit of real property as defined by the assessors in accordance with the deed for the property and shall include a condominium unit.

SECTION 6.   For purposes of the exemption, "total annual household income" shall be the sum of the applicant's or joint applicant’s "total taxable 5.3 per cent income" on Massachusetts Form 1 and those same incomes for other income-producing members of the household. The income shall be increased by amounts that may have been excluded or subtracted from calculation, such as income from social security benefits, cash public assistance, tax-exempt interest and dividends, capital gains, income from a partnership or trust, returns on capital reported on schedule C and excluded income from any other source.

SECTION 7.   Acceptance of this act by the town of Sudbury shall be by an affirmative vote of a majority of the voters at any regular or special election at which the question of acceptance was placed on the ballot. This act shall become effective on the thirtieth day following the affirmative vote.

SECTION 8.   The acceptance of this act may be revoked by an affirmative vote of a majority of the voters at any regular or special town election at which the question of revocation has been placed on the ballot by a two-thirds vote of then sitting members of the board of selectmen. Revocation of this act shall become effective on the thirtieth day following that affirmative vote and shall thereafter apply only for applications received following revocation. 

SECTION 9.   Acceptance of this act by the town of Sudbury shall automatically expire after 3 years of implementation unless reaffirmed by the affirmative vote of a majority of the voters at a town meeting and no further action of the general court shall be necessary.   Once reaffirmed, pursuant to this section, it shall then take an affirmative vote by two-thirds of the voters at a regular or special election at which the question of revocation has been placed on the ballot by a two-thirds vote of then sitting members of the board of selectmen for this act to be revoked.

SECTION 10.  The income limits of subsection 2(a) shall be adjusted annually for inflation using the either the income limits for the Massachusetts Income Tax Circuit Breaker for the prior year unless changes in  Consumer Price Index of all items for Boston for November of the previous Fiscal Year where the base for the amounts listed above shall be the Consumer Price Index of all items for Boston without seasonal adjustments for July 2010 as determined by the U.S. Bureau of Labor Statistics and published by the Federal Reserve Bank of Boston in its on-line database of Economic Indicators would yield higher income limits. 

Or act on anything relative thereto.

Petitioners Report:  The state legislature has long recognized the burden property taxes place on many lower income senior citizens.  In response they enacted a Circuit Breaker tax credit for senior citizens who pay more than 10% of their income in local property taxes.  Unfortunately, the maximum benefit available from this program is very limited providing a maximum benefit of $960 per year.  This limit is a large percentage of the average tax bill in many cities and towns but is less than 10% of the average property tax bill in Sudbury. 

     On April 29, 2010 a special act for the Town of Hamilton was enacted by the legislature and signed by the governor that enables Hamilton to provide a means tested circuit breaker designed to reduce property taxes for their senior citizens who pay more than 10% of their income in property taxes.  At the November 9, 2010 special election 75.7% of those voting voted to adopt the special act where only a majority was required.  The adoption of the Hamilton special act was the inspiration for doing something very similar for Sudbury.

     In previous years extensive study has taken place in Sudbury on the burden property taxes place on many of its senior citizens.  Not only are their incomes much lower than those of younger Sudbury households, but because of their lower incomes far less, if any of their property tax payments are subsidized by federal income tax reductions from property tax deductions.  Furthermore, senior citizen households receive few municipal services such that their property taxes subsidize municipal services consumed by others with far higher average incomes.  Finally it is well established that when Sudbury’s senior citizens move out of Sudbury their houses are most often purchased by families with children who will consume more town services than their property taxes.