Fewer see full benefit from city tax relief program

The number of elderly and disabled homeowners receiving full tax relief in Lynchburg has dropped by triple digits over the past four years.

The city prorates the real estate tax bills of homeowners who are either over 65 or permanently disabled. Eligible candidates must also meet a set of financial criteria previously based solely on annual income and net worth.

Those economic benchmarks were revised two years ago as demand for relief began to outpace funding. The new system, created by City Council, established a more complex scale of weighted eligibility aimed at reserving full aid for only the poorest applicants.

Those amendments, designed to funnel the greatest aid to those with the greatest need, are working as intended, two city councilmen said this week.

The next step, said councilmen Mike Gillette and Jeff Helgeson, will be to re-examine the program’s funding following next year’s reassessment.

Post-assessment infusions of cash were needed in both 2005 and 2007. No extra money was originally provided in 2005. The budget was amended later after rising property values drove relief applications up 9 percent. The city got more than 1,000 requests for relief that year. Not all who apply qualify for help.

Prior to the recent eligibility changes, the tax program was designed to grant maximum relief to as many as possible.

In 2004, the year before the program came under review, full tax breaks were given to 923 households, or 98 percent of all eligible applicants.

Last year, 711 households, or 73 percent of the applicant pool, got a full break. Another 20 candidates met the program’s basic financial criteria, but were ultimately edged out by the new, more detailed standards.

Those households received no assistance.

A majority of applicants continue to see their full tax bill waived by the city under the terms of the new system.

The amended process, approved in 2006, still considers income and net worth. The ceilings on those dual standards were raised at the same time the weighted method of dispensing relief was approved.

The end result was that more people became eligible, but were no longer assured the same degree of assistance.

Those with higher income levels get a smaller discount on their taxes. Funding restrictions can also lead to eligible candidates with the biggest incomes being pushed out entirely, as was the case with the 20 barred applicants last year.

Under the present system, relief recipients cannot make more than $30,000 a year.

Councilman Gillette, of Ward I, said the new process operated under the “plainly fair” principle that the poorest among us deserve the most aid.

“This is not just a matter of taxes being bad and aid being good, so just go ahead and give as much aid as you can,” he said. “What matters to me is the people with greater need are getting greater help.”

Councilman Helgeson of Ward III noted some of those getting partial assistance under the current program had not been eligible for any aid in years past.

“I can think of several people off the top of my head who were delighted with the changes,” he said.

The two councilmen both agreed funding for the program would have to be revisited after the next reassessment.

Rising property values and fluctuations in support have played havoc with relief levels in recent years.

In 2005, relief applicants saw their property assessments jump by an average of 17.6 percent, according to Commissioner of the Revenue Mitch Nuckles, who administers the tax program.

At the same time, program funding increased only 9.6 percent. The number of homes earning full relief subsequently dropped that year to 757, or 74 percent of all candidates.

In 2006, the first year the revised system was in place, funding levels took a cut and the group enjoying full assistance shrank again to 583 homes, or 59 percent of all beneficiaries.

A bigger budget approved the following year bumped those numbers back up.

“We’ll be looking at this again, obviously,” Helgeson said of future funding levels. “It’s not done. As assessments go up, we’ll have to keep doing more.”

This year, the city set aside slightly more than $621,500 for tax relief. Nuckles expects his office will once again receive more than 1,000 applications.

The deadline to apply is today.

deadline

- Applications for real estate tax relief for the elderly and disabled must be submitted to Lynchburg’s commissioner of the revenue by today.
- For more information, call 455-3870 or visit the commissioner’s office at City Hall, 900 Church St.