For more than two weeks, supporters of a proposed tax exemption for Greenville residents aged 65 or older have been signing a petition in an effort to encourage the city council to seriously consider freezing the property tax amount for seniors.
At Tuesday’s Greenville City Council meeting, city staff, council members, and residents had, by far, the most substantive public discussion on the prospective freeze since it was first recommended in April by former councilman James Evans.
The council’s regular session Tuesday began with Greenville City Manager Summer Spurlock sharing some projections on what the possible economic impact of the freeze could be.
The proposed tax exemption for senior residents – or younger people who are disabled – would not be a freeze on the property tax rate or the property’s appraised value.
It would, instead, be a freeze on the tax amount, meaning that if a senior citizen were to take advantage of the exemption, and the amount they had to pay in city taxes the year they turned 65 was $300, then they would continue to pay $300 in city taxes year-after-year, regardless of if the tax rate or their property’s value increased.
This has made the proposal attractive to many residents who are living on a fixed income such as social security benefits or pensions.
While sharing her projections on the potential loss in revenue from the freeze, Spurlock explained that the figures were based on “current numbers” as far as people who could qualify for the exemption and a .4 percent increase per year in the number of people taking the exemption was used in the estimates, but factors such as mortality were not taken into account.
Using an average increase of 8 percent in taxable property values each year and an average tax rate of 68.4 cents per $100 valuation, Spurlock calculated that the exemption could result in the city receiving about $5.07 million less in revenue over a 20-year period.
Despite the potential change in revenue, several cities and counties in Texas already offer the tax exemption to its seniors.
According to Spurlock’s presentation, 287 out of 1072 cites – or 27 percent – reported to the Texas comptroller that they had such a freeze as of 2017.
Also in 2017, 120 out of 254 counties – or 47 percent – reported that they had frozen the property tax for seniors as well.
Spurlock also mentioned that, in the same year, 10 out of 15 of Greenville’s “comparison cities” – Cleburne, Paris, Plano, Lewisville, Tyler, Longview, Rowlett, Wylie, Rockwall and Forney – had a senior tax freeze.
The five comparison cities that reported to the comptroller’s office in 2017 that they did not have a tax freeze for those who are 65 or older or who are disabled were Denison, Corsicana, Health, Garland and McKinney.
Despite the high number of comparison cities that offer the freeze, some of the council members saw the presentation as confirming their concerns about its potential long-term impact.
“Everybody that you freeze it for who is 65, actuarily, a 65 year old is expected to live to age 87, so that’s 22 years of freeze,” Councilman Brent Money said. “It can be 25 or 30 years before you see the full impact of it, so my concern is we don’t know, here, what the longterm impact will be.
“Everyone wants something cheaper than what they’ve got, whether they’re 65 or 25, and I want to figure out a way to provide some relief, but we’ve got to understand the long term financial impact.
“None of us will be here on the council in 15 or 20 years, but I wouldn’t like for people to look back and think bad things about us for doing this,” Money said.
Conversely, due to widespread community support, other council members urged for at least a vote on the senior citizens’ property tax freeze.
“The senior tax freeze is outlined in the Texas Constitution,” Councilman Al Atkins said. “I do not, in any shape or form, want to make the senior citizens 65 and older a political football. The constitution allows the freeze … and honestly, I hope it goes to election by the people to let them have their say.”
Another argument presented in the discussion came from Councilman Jerry Ransom, who believed that an exemption based on need rather than age could both offer needed relief to taxpayers and offer the city more certainty in its budget planning.
“The average price of a Greenville home is $113,000. As an example and to simplify the math, I’ll use a $100,000 home with a $20,000 annual exemption,” Ransom said as he read a prepared statement.
“This approach provides an immediate 10 percent discount for a $200,000 home; a 20 percent discount for a $100,000 home; and a 40 percent discount for a $50,000 home, which, importantly, addresses need because an exemption provides an escalating discount for lower-valued homeowners who will benefit more,” Ransom explained.
“This approach for a $100,000 home with an average (annual) appraisal increase of 8 percent provides more relief the first three years than the freeze and, it provides six years more relief for the $50,000 homeowner,” he added.
“At the same time, it provides the city certainty in calculating the tax appraised value by simply multiplying the exemption – in the example, $20,000 – by the number of seniors who opt into the program.
“It would cost the city just over $200,000 this year or approximately one cent on the tax rate,” Ransom continued. “More importantly, it protects the city’s tax base against the draconian impact of unpredictable compounding appraisals and escalating service costs.”
After giving his suggestion of a different exemption system for property taxes, Ransom said that he was both against the senior tax freeze and did not think that it should be the council who votes on whether or not to have it, but for residents to vote for or against it in a general election.
At Tuesday’s meeting, supporters of the tax freeze for seniors filled the council chambers and as many as 40 people spilled out into the hallway.
During the citizens to be heard portion of the meeting, 21 residents spoke, with 16 giving their support specifically for the senior tax freeze, and four saying that they would like for the council to consider either the freeze or a value-based "escalating" exemption system similar to what Ransom suggested.
The one resident who spoke in opposition to the freeze was Troy Brakefield, who recommended that need-based property tax exemptions be made on more of an emergency basis.
“I think that we could probably do better than a blanket 65 freeze,” Brakefield said.
“Just because something is in the Texas constitution doesn’t make it a good law,” he said in response to Councilman Atkins’ earlier comments. “Often, lawmakers, they don’t have much sense. It used to be, 10 years ago, 75 percent of the school funding was from the state. Now, it’s less than 30 percent. Is that smart?
“We do need to help the poor. A tax circuit breaker could kick in like a circuit breaker does if you have an electrical surge,” Brakefield explained. “And, when taxes hit a certain level of a person’s income, that could give them much needed relief.
“That would be smart for the people that need it the most, and he people that don’t need it wouldn’t have to worry about it.
In addition to suggesting a property tax circuit breaker for relief when it’s needed, Brakefield warned against excessively cutting departmental budgets in an effort to lower the overall tax rate.
“We also need to help those in need, but we don’t need to cut city department budgets to the tune of 20 percent,” he said. “If we take 20 percent off any of our departments, I think there will be significant ramifications and everybody would feel it … not just the 40 people in the hall, but all 28,000 people in town.
“We can be smart and compassionate at the same time,” Brakefield said as he concluded his comments.
Those still interested in signing the petition in support of the property tax freeze for those aged 65 and older can do so today, at Terry Driggers Realty Service, from 9 a.m. to 5 p.m.