'Elderly' exemption benefits the wealthy, not those on fixed incomes

April 16, 2006|By TIM ROWLAND

As the old saying goes, scientists have concluded that if your parents never had any children, chances are you won't have any children either. That bit of wisdom exposes one, but by no means all, of the flaws in the county building-tax exemption for senior housing.

Not that we should be surprised. Watching County Commissioners and state lawmakers wrestle with this excise tax over the past three years has been something akin to watching a toddler eat a poached egg.

This is not entirely our elected officials' fault. The excise tax on new homes is one of those necessities for a growing county that is bound to have flaws no matter how it's drawn up.

The excise tax does two things. First, it acts like a parachute on a dragster, somewhat slowing the speed of development through higher housing costs. Second, the revenue from the tax helps pay for the roads, schools and services that this new development creates.


Without a growth tax, the financial burden on existing homeowners would be greater, probably substantially so.

For new homebuilders, however, it means that before you ever sink a shovel into your lot, you owe between $13,000 and $31,000. Put another way, on a 30-year mortgage for a new home, up to $175 of your monthly payment will go toward paying off your excise tax.

Few will argue this is terribly unfair for a family of six earning enough income to afford a new McMansion on a scenic, rolling hillside. But a broad-brush excise tax opens the door to a number of hypothetical "what abouts?"

What about the young couple just starting out on a limited budget? What about renters for whom the tax sets the home-ownership bar too high? What about affordable housing for middle- and low-income earners?

And what about the poor senior citizens, who are just a Social Security COLA away from a catfood diet?

To that last point, the county excise tax exempts housing developments designed for a population 80 percent of which is over the age of 55, on the notion that since they don't have any school-age kids, they shouldn't have to pay the burden for school construction. It appears to be patterned after federal guidelines to ensure poor elderly people of having shelter.

The Citizens for the Protection of Washington County smell a rat, and rightly so.

Apparently, those responsible for this exemption have never heard of grandkids. I don't care if you're 155, if you have had children and your children have had children, you are directly responsible for school population.

One's civic obligations do not end at age 55. Indeed, there are plenty of people in their 30s who have no children at all. They have created no extra burden on the school system. But they have to pay the tax, while a 60-year-old with 15 grandkids attending public schools does not?

As a statement of both policy and logic, it is hard to imagine anything more flawed. And remember, people 55 and over have themselves benefited from public education. It lasted them all their lives and contributed directly to their income. We're effectively saying, "OK, you got yours, now forget about the next generation."

My best guess - no, this isn't a guess, I'd be willing to venture this is a fact cast in bronze - is that our office holders, egged on by developers, heard the words "senior citizens" and little political bells began going off in their heads. Here was an opportunity to present themselves as friends of the elderly, who coincidentally vote in greater percentages than other demos.

But let's get real. How many sweet little old ladies living in Walnut Towers do you think tottered up to one of our commissioners and said, "You know sonny, I want to build my dream house in the country, but ..."

It's no accident that "senior citizen" is now defined as 55. Just take a guess which age group in America has the greatest wealth? In 2001 dollars, the 50-59 age group had a median net worth of $179,000, highest on chart. By contrast, those in their 30s had a net worth of just $37,000. Those in their 60s are worth $168,000, those in their 20s are worth $8,000.

So what the ordinance drawers have done is taken the wealthiest group of people and let them off largely unscathed, while placing the burden squarely on those who are just beginning to get a financial foothold.

"Senior citizen" is not defined in this ordinance as 65 and up, because people of that age are selling their homes. That, or staying put. If they're selling in the name of downsizing it's hard to believe - in today's housing market - they're not coming out of the deal in a financially attractive situation.

CPWC believes the developers are behind this senior exemption, and frankly I'd be disappointed in our developers if they weren't. At least there's one group of people in our county that knows what it's doing.

Let me ask the developers something: If this exemption goes through, are you suddenly going to be putting up a lot of $50,000 cottages that our elderly people on fixed incomes can afford? Hmm? Or are you going to build an army of luxurious expensive homes or condos and label them "elderly" to skirt the tax?

If 55 is elderly, I'm a giraffe, and this is clearly not in keeping with the spirit of regulations origionally enacted to give those on fixed incomes a break.

This isn't just a loophole as CWPC describes it, this is the mother of all loopholes that will give a tremendous break to wealthy wage-earners and retirees, while shifting tax burden to the young and nonhomebuying elderly. Even if the commissioners' motives are pure, they should realize that it will come at the expense - not the benefit - of the people it purports to help.

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