County trustees across Tennessee are trying to shore up a state tax relief program to avoid cuts that might leave low-income senior citizens and disabled veterans strapped at tax time.
The state's Property Tax Relief Program provides property tax rebates for senior citizens who make $28,000 a year or less; the disabled; veterans who are disabled from service and the surviving spouses of fallen soldiers. Residents apply at the local trustee's office, and the state credits a portion of their tax bills.
Gov. Bill Haslam has discussed plans to slash funding for the program next year from $33 million to $29 million, leaving the more than 150,000 poor and disabled enrollees to shoulder more of their property tax bills.polls here 3078
Hamilton County Trustee Bill Hullander said he and trustees from Davidson, Shelby, Rutherford and Anderson counties are working on a plan to get the program fully funded, or to reduce tax credits for veterans.
"It's a good program for the elderly and veterans," Hullander said. "However, [in Hamilton County] the veterans make up 9 percent of the people who participate in this program but they are getting 46 percent of the money."
That's because the benefit thresholds are a bit lopsided.
The low-income elderly and disabled get tax relief for the first $25,000 of their appraised property. But disabled veterans get relief on the first $175,000 of theirs.
On average, that means seniors get $150 knocked off their property tax bills for the year. But the average tax credit for a disabled veteran is about $750.
Hamilton County's program now serves 2,984 elderly or disabled people and 354 veterans and widows. Hullander did not have specifics for the credits locally, because his office was still crunching numbers.
"I would hope they could fund all these totally, but if that's not the case, it seems like they need to look at something on the veterans to bring that part down," Hullander said. "We've got at least one veteran on the program whose home appraised for $600,000."
Statewide, the disparity in benefits isn't as extreme -- but it's there.
In 2013, there were 133,511 low-income elderly or disabled participants, or 89 percent of the people on the program, according to state comptroller records. They received just over $19.7 million, or 64 percent, of the total pie. The 16,888 disabled veterans and widows represented 11 percent of participants but got 36 percent of the benefits, or $11.3 million.
John Dunn, spokesman for State Comptroller Justin Wilson, said the Haslam administration is not looking to cut anyone out of the program. Instead, everyone's relief will be prorated, he said.
The goal is to bring the program's budget back down to 2013 levels.
In 2010, the program's appropriation was $25 million. But as more residents enrolled, the allocation grew to $28 million in 2012 and $33 million in 2014.
"What's happened over the years is more and more money is being allocated to support the full funding of this program," Dunn said. "The administration is looking for other ways to provide tax relief."
But the whole issue has become a political football, and few people want to play.
Hullander said the administration is looking to a group of five trustees to make the decisions.
"We feel like they are trying to put pressure on us, so they can say, 'No, it was those trustees that made those changes to the veterans' benefits,'" he said. "If we don't come up with something, they are going to cut 14 percent on everything. That means little Ms. Jones down the street is going to get less, and we don't think that's fair."
By the end of February, the trustees will have a plan to present to the General Assembly. But Hullander said it's going to be up to legislators to make decisions.
"We will just present facts to them and let them decide what to do," Hullander said.
State Rep. Gerald McCormick, R-Chattanooga, said he fully expects Democrats to accuse Republicans of trying to cut veterans' tax benefits.
"Of course, we can't have an honest discussion about this because of the politics," he said.
His preference is also to fully fund the program.
"I am a war veteran myself, and I don't want to harm any veteran in any way. But, laying the groundwork with that, we have to be financially responsible and pay all our bills," McCormick said.
Rep. JoAnne Favors, D-Chattanooga, said she had not yet fully studied the property tax relief program. But she did say there was more the county could do to help seniors.
"They have the ability to freeze property taxes for seniors, regardless of income, and they have chosen not to do that," Favors said.
Contact staff writer Louie Brogdon at lbrogdon @timesfreepress.com, @glbrogdoniv on Twitter or at 423-757-6481.