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.