Kane County hopes for defeat of two potential tax breaks
An easier road to senior citizen property tax freezes and passing along of artificially low property assessments to builders are not policies Kane County supports, at least not in the form both proposals will be presented Thursday in Springfield.
The county board's legislative committee decided Wednesday that both changes to the law would raise the property taxes of most everyone in the county too much to support either bill.
The senior citizen assessment freeze effectively locks in the property value of a home a senior citizen owns and lives in at whatever it was the first year a senior qualifies for the exemption. In other words, the senior citizen homeowner qualifying for the exemption does not experience the same tax increase everyone else does when their assessed home value rises.
The law has already been on the books for nearly 20 years. The proposed change would make it so seniors no longer have to apply for the freeze every year after they've qualified for two years in a row.
That's where the problem comes in, county officials say.
Income levels for households senior citizens live in may fluctuate greatly year to year, especially if children move back home. As a result, hundreds of seniors don't qualify for the exemption in any given year. In 2007, 985 seniors didn't qualify for the exemption despite receiving it in 2005 and 2006. If those homes just received a pass because they previously qualified, all the other homeowners in the county would have been stuck with paying the taxes those homeowners unfairly bypassed.
Why? Because once a taxing body locks in its levy, that taxing body gets its money no matter how many people get their assessments lowered by exemptions. The more people who qualify, the more everyone else is left paying the bill.
Kane County wants seniors to apply every year so as to make sure they really qualify for the tax break. However, committee members said they would support an automatic granting of the freeze once a senior reaches 70. Research shows that's the age when the household income of seniors usually stops fluctuating.
The committee also voted to oppose a change in the tax code that would give a property tax break to builders that is currently only available to the initial developers of farmland property. The break keeps the assessed value of the property at its original, unimproved farm value until the property is sold or has usable or habitable buildings built on it.
The change would extend that break to builders if they purchase individual lots from the initial developer.
The harm of the change, county officials said, is the same as the potential change to the senior freeze law. More than 9,000 properties in the county currently receive the tax break, shifting an additional $17.2 million property tax burden to everyone else in the county to make up the difference. The change would keep that burden in place even longer than it currently exists.
Officials said they would support the change to spur development during the recession as long as the change sunsets by 2012.