When Republicans held power during Colorado’s last budgetary meltdown, they suspended a special property tax break for seniors to help balance the budget. It was the right thing to do given the optionsand because the exemption itself, which rewards some seniors and ignores others without regard to income, had only been in place since 2000.
Fast-forward to the most recent recession, when revenues again nose-dived. This time, Republicans adopted an aggressively protective attitude toward the same tax break.
“Today was a bad day to be a senior citizen in Colorado,” proclaimed the Senate Republican website last month after that chamber approved Senate Bill 190, which would suspend the exemption for two years. Democrats “are raising taxes — again — on one of our state’s most vulnerable populations,” complained Minority Leader Josh Penry, R-Grand Junction.
Penry’s concern for the elderly may be heart-felt, but the origin of the exemption is less edifying than he implies. The state enjoyed a surplus in 2000 and lawmakers were doing their best to divert as much of it as possible from all taxpayers, who deserved an equitable share in the form of a refund, to a favored few. Among their schemes was a ballot measure benefiting a select group of seniors — and voters readily approved it.
The tax exemption had no compelling rationale when it was conceived and continues to lack one today. I asked the referendum’s prime sponsor, Sen. John Evans, R-Parker, more than once at the time if he had any evidence that seniors were being forced to sell their homes because they couldn’t pay a property bill, but his answer each time was no.
If the elderly are “one of our state’s most vulnerable populations,” as Penry maintains, the relevant question is: Compared to whom? The poverty rate among the elderly is lower than that of the population at large, and much lower than it is among children. Their average net worth is substantially higher, too. But pandering to the elderly is a time-honored path to political success — and the major reason why Congress cannot bring itself to reform the entitlement spending that threatens to bankrupt this country.
For Coloradans over 65 years old, the law exempts 50 percent of the first $200,000 in value of a home from taxation, with the state paying the tax instead. The beneficiaries can be rich or poor, but they must have lived in their home for at least 10 years — meaning the exemption has no relation to actual need and excludes a number of seniors for no compelling reason.
Some elderly Coloradans do of course have trouble paying their property tax. But if they want, they can have the state treasurer’s office pay it for them under a tax deferral program that’s been around for years. When the home is sold or transferred (upon the person’s death, for example), a portion of the estate will be used to pay the state back. The treasurer’s office tells me there were 682 participants in the program for the 2009 tax year, as opposed to more than 160,000 properties approved for the tax exemption. No wonder that exemption costs the state more than $90 million a year.
Coloradans should not pay different property taxes based upon their age or length of time in a home. It’s divisive public policy based upon mythology about the elderly and political opportunism.
Fear has a role, too. Few politicians in competitive districts want to leave themselves vulnerable to a charge of insensitivity toward seniors. Perhaps that’s one reason SB 190 is still in play in the House, with only a few days left in the legislative session. If a vote on the bill could provoke exaggerated rhetoric in April, you can imagine what some will be saying about it by Election Day.
E-mail Vincent Carroll at vcarroll@denverpost.com.
