Decatur Schools Release Statement Explaining Support of “Sunset Clause” For Senior Tax Exemption

24 thoughts on “Decatur Schools Release Statement Explaining Support of “Sunset Clause” For Senior Tax Exemption”

1. 
   

2. “The sunset is a good compromise.” Bollocks!

   The fact that the legislation still has no exemption for high income seniors (i.e. those that can afford to pay the taxes), nor does it have an exemption clause for property values/millage rates means there wasn’t any compromise. You got a very small/minuscule/tiny provision changed by potentially (not currently in the legislation now) adding in a sunset clause. You could effectively be giving a tax break to people who need it the least just because you don’t want more kids in the school system. PUT AN INCOME/PROPERTY VALUE CAP ON IT!!!

   And please do not get me wrong, I am completely 100% for giving seniors a tax break to those that actually do need it. No senior should have their retirement mistreated or reduced because the tax burden is too heavy. My point is that for those with high wealth/income should carry as much a burden as the rest of the CoD residents do instead of effectively increasing our taxes while those that make more are paying less due to age.

   1. Also, I know at least one person in Decatur who will have kids in CSD after the age of 65 who clearly should not get the exemption.

      1. Ah, the joys of late life parenting (which can occur for many reasons–late marriage, fostering, adoption, grandparents who become parents, etc.). I think such parents deserve a medal frankly, regardless of whether or not they are deemed to deserve an exemption. Handling teens, retirement, and Medicare all at once is almost as fun as breast milk pumping at work.

      2. Of course, people who have kids at age 50 may have been paying property taxes 25 years before their kid hits kindergarten…

         1. There again, we could have people at age 50 who have kids that have just moved into CoD because due to their age, they have been able to amass more wealth to afford the neighborhood. What should we do in those scenarios?

   2. Not to take issue with any of your points but I think it’s fairly clear that the reason there’s no provision for a cap is because having one would be in direct opposition to their goal, which they state repeatedly as, “The School Board has been and remains committed to providing tax relief for ALL seniors.” (emphasis mine)

      In that context, the present approach makes perfect sense and I commend them for adhering to their stated objectives. In short, if folks want a different approach (again, not arguing for or against that), there’ll need to be a different goal.

      1. Scott,

         As always, I agree with nearly everything you have said. I agree CSD wants to include it for “all” seniors, but as some anecdotal evidence has suggested we should be asking CSD the real question: “why?”

         I understand from their perspective why it is important, but is it not our civic responsibility/duty to question the logic and motivations of our government, if they are who is representing us? I guess this is one of the points where you can say I agree with the CSD in principle, but that not putting exemptions in for a highly expensive piece of legislation (for other tax payers) seems like a short-sighted and potentially dangerous precedent to set.

         1. And I don’t necessarily disagree. My thought is just a sense that the debate over the issues you raise has already occurred (likely in the form of citizens petitioning the city commission and the school board in various ways for some form of relief, followed by the school board starting to test the waters with a response and that response going largely unchallenged). I think they’re in a position now that, were they to start talking income caps or similar, they’d be fighting off charges of back pedaling. And I don’t think anyone wants that.

            So my guess is that we’ll get a full-on, 65+ school exemption passed by the state and on the ballot in November. Whether or not there’s further debate warranted over issues like impacts and fairness.

         2. Seems like the answer to the “why” question is fairly well stated: Decatur wants childless seniors to stay here so more families with kids don’t move in.

   3. How would we define high wealth/income? Let’s say a senior has no mortgage, no children, lives alone or with a spouse, and has an income of $100,000 per year (any seemingly decent number will do for this example). From the outside, she looks like she’s pretty set, right?

      That’s only one side of the equation. On the other side, that senior fell last year and broke her hip. She is struggling to pay the hospital and other related medical bills. Under a high wealth/income provision, how do you determine if she is eligible for tax relief?

      1. To account for ability to pay, you have to head towards the steaming pile of complexity that is our federal tax code, where we’ve tried to make all sorts of case-by-case exceptions to a straight, top-line income number. You know — this is deductible, but not that. This counts as income but not that. This deduction phases out if you make more than X. And so forth.

         One benefit of property tax is that it’s simple. Very little muss and fuss with deductions and such. Easy to calculate. No professional preparation fees needed and no auditing.

         Administering a code premised on ability to pay would be a nightmare for local government, which would have to have some capacity to audit tax returns.

      2. Economic policy will never capture all situations. Exempting some portion of assessed value would be a simpler to implement proxy for assisting those seniors with lower incomes, and it captures those who may have lower incomes but higher wealth thanks to the equity in their homes. It’s a break for all seniors, but a more significant one for those with more modest assets. I think it’s a good compromise between blanket tax exemptions for all seniors and the more unwieldy to execute income-based policy.

         1. How about raising the age cut off? Maybe 70 or 75 is less objectionable and more manageable. Most seniors I know are still working and 65 and not necessarily because they have to. Isn’t 65 the new 40?

            1. Empty nesters , though still working, may choose to downsize to save on expenses . (Several in my neighborhood have already done so.) If they go, it is almost certain that families with school aged children will take their place.

               My understanding of this tax break proposal is that it has little to do with helping seniors age in place and lots to do with trying to limit further growth of CSD enrollment, at least for the short run. That’s why there is no talk of means testing.

               The new classrooms funded by the bond issue can’t be built overnight. The 5 year expiration for the tax break supported by the BOE is hoped to give the system a bit of breathing room to plan and complete the needed expansion.

               After 5 years, City Commission may want to go forward with a more income dependent formula to help low income seniors . As far as BOE, once they have expanded classroom space, I’d bet they will favor return to current tax eligibility guidelines.

         2. Show me the numbers. I’m all in favor of helping seniors be able to “retire in place” but have some reservations about a blanket tax exemption. Has anyone considered the possibility of a voluntary senior property tax deferral where taxes would only be collected after the house later changes hands? I believe the state already has something like that in place with regards to state and county taxes.

   4. I am frustrated to hear the continued call for no tax cuts for people who have been “lucky” enough to make more money or save more money than the rest. I also use the word “Lucky” because some times is comes from hard work, education or just plain old luck. I am sorry that there are some people who have less but it is not fair to always make those individuals who have the means carry the masses. Call me a capitalist or republican or whatever nasty term you would like but it is not the job of the better off to always pay for the ones who are not. I think that it should be a simple item of age and keep it simple.

      1. Agree. And I’ll add, just because I was a responsible planner and I might look “wealthy” at 65, that money has to last me another 25 maybe 30 years. By the time I hit 65, I will have already contributed for 32 years without complaint. (And this tax break will have sunset.)

         1. My grandfather paid in for 56 years without complaint and got his exemption at age 80. He probably helped support your children’s (or your generation’s children’s) education. Why should those able not be expected to do the same?
            http://www.theatlantic.com/business/archive/2012/10/who-destroyed-the-economy-the-case-against-the-baby-boomers/263291/

      2. I think you may be looking at it the wrong way. You wont be paying any “extra” taxes, you will be paying the exact same taxes you have been paying along with the same taxes everyone else under 65 would pay. No one is asking you to “carry the masses”, your viewpoint does not appear to be correct since it will be the “masses” that will be carrying most of the tax burden with the exception of seniors.

         I guess we should apologize to you for having a blessed life? I am not trying to pick on you, only hoping to show you the reasoning behind our thoughts.

         1. Good point about “blessed life”. When things are going well, it’s easy to think that whatever you did in life was the cause and therefore you are entitled to whatever health and wealth you have. But many a personal history and great novel have demonstrated that it only takes a few instances of bad luck to combine and result in a completely different outcome for the exact same person doing the exact same things. Not trying to have too many references to religion, but I have always been struck by the phrase “There but for the grace of God go I….”

4. Please help me understand… For this to actually happen, would this have to be taken up by the Georgia Legislature (which sounds iffy) and passed by both houses and signed by the Guv (iffy-er)? And if all the stars were to align, are we looking at 3-5 years from now? Or is this more plausible than that?

   Just turned 65.

   1. The legislation has already been introduced in both houses of the Georgia Legislature. Judging by the little opposition it has received, I think it stands a good chance of getting passed. If it does get passed, it has to get signed by the Gov (Deal will probably sign it, he doesn’t have anything to lose and makes him look more like a Republican). Then it gets put into law sometime around July.

      We vote as a municipality whether we want local adoption of the tax break in this November election cycle. If it is approved by the electorate, it will become CoD law by next year at some time (this will depend on the wording of the local law when we go to the polls in November) Note, all of this is the hypothetical proposal from CoD & CSD.

6. I’ve paid school taxes in Decatur for over 25 years and listened to people complain that it’s not fair for them to have to pay because they have no kids or they send their kids to private school or they think the parents should have to pay tuition for more than one kid, or they don’t like the way the school board spends the money, etc. I never minded a whole lot because I assumed it was part of the social contract of living in a community. We educate our children and help each other out. Also, I don’t have kids, but I always planned to stay here in the city and selfishly didn’t want to be surrounded by ignorant uneducated people when I got old.

8. Here are some random, disjointed thoughts on the proposed exemption (for the record, I have not yet made up my mind on how exactly I feel about the issue):

   1) I would like to see some sort of analysis showing that seniors are moving because the school taxes are too high. I am not any sort of real estate expert or accountant, but from personal observation, the more likely reason that a given senior will move is the amount of money (high 300s, low 400s) that builders will pay in pure teardown value for many older homes in Decatur (in contrast to half as much, or less, in surrounding areas). A tax exemption will not change the economic calculus of being able to sell your home for twice as much as you ever thought you could.

   2) I have always been a firm believer that decisions are best made when all of the parties have “skin in the game.” It is somewhat concerning that the proposed exemption would create a decent sized class (10%?) of registered voters, able to vote in Board of Education elections, but without any requirement to pay the commensurate taxes that all other voters would pay. I doubt that the Board of Education has thought through how the exemption will play in future elections, but I would be willing to bet a “tasting tour” at Three Taverns that the next election will see at least one candidate promising to make the exemption permanent, notwithstanding the overall economic impact.

   3) I am fairly new to Decatur, but from everything I have read, the per-citizen cost for City of Decatur schools is somewhat higher, but still roughly comparable to, that of DeKalb County schools. The City of Decatur proper, however, is substantially more expensive than DeKalb County (albeit for far better and generally less corrupt services). I understand there are some historical tensions between the City and the City Schools; however, I do wonder why the school tax has been targeted as “the problem,” when City proper costs are so high.

   4) Some have proposed the senior exemption as a way of slowing down the growth of the school-aged population as a chance for the system to catch its breath and finalize/integrate physical infrastructure expansion plans. Again, I have no numbers on the marginal impact of the senior exemption on the increase of school-aged children, but I doubt it is going to be substantial enough to truly bend the growth curve down from its current pace. Somewhat related to that front, it would also be very nice to see the City/School Board move faster on the bonds and related plans – I understand that everyone has a day job and is a volunteer and that Dr. Dude is new, but pulling back the bond approval meeting because it was incorrectly written up and taking half a year to conduct due diligence is concerning.

   5) Finally, I would like to see the school system put out some actual, firm numbers on the impact of the senior exemption. So far, we have essentially been told that the exemption should cost “around $1,000,000,” but that it was impossible to actually determine the impact. After all of the detailed planning work that went into the bond, I would think that the school board could come up with something more concrete for the more analytically-minded – number of seniors who would have left but will now stay, growth of school-aged population reduced, millage increase on those still paying school tax to accommodate the exemption. While the goal is certainly laudatory, doing something merely because it seems like a good thing to do without fully understanding the consequences (or even, from all appearances, trying to understand them) is not reassuring.

   Apologies for the length of the post. For the TL; DR crowd, need more information before I can come up with a position.

Comments are closed.