[Rhode Island] Poverty Tax-Break Plan Sparks Hopkinton Debate

from The Westerly Sun

By Eric Creamer - The Sun Staff

HOPKINTON - Property tax deferral for poverty-stricken residents garnered some opposition and questions as well as praise at Monday's town council meeting.

The resolution, introduced by Council President Beverly Kenney, would allow low-income residents to defer a portion or in some cases all property tax payment. Eventually, the money would be repaid when the property is either sold or the resident is no longer considered in that category.

According to the resolution, an applicant's "income shall not exceed the Federal Poverty Threshold Standards." According to the U.S. Census, the poverty level is a yearly income of $10,160 for a single person under 65 years of age, or $9,367 for those over 65. The level for a three-person household is $15,735, while the definition for a four-person household is $19,806.

Town Solicitor Margaret Steele said Monday residents would have to provide documents of proof to the tax assessor.

Councilor Gary Williams wasn't yet convinced.

"What happens of a person is no longer at that poverty level after the deferral's been granted?" he asked. "That's part of my problem with this. Who pays the taxes that are deferred because the town depends on that money?"

Kenney said that no interest accumulates on the unpaid tax money, which Steele said remains as a lien on the resident's property.

Williams also expressed concern about the amount of work the assessor will be putting in because "it is quite a responsibility."

Steele and Kenney tried to dispel the arguments.

"This is a deferment; not an exemption," said Kenney. "In an exemption, the town would never see the money. A person could start paying $50 a month five years after they are out of poverty level, but we'll have to talk to the assessor to discuss (the pay-back schedule and wording of the ordinance)."



Kenney said that there would be "little judgment" by the assessor when receiving applications because "the guidelines are standard."

"This is a pretty standard ordinance," she said. "Everyone would be treated equally. It's supposed to be cut and dry and getting too much into policy details (of individual mortgages) makes it more subjective, which is not the intent."

Some residents were also skeptical.

"It's like an interest-free loan given by the town," said Harold Panciera. "The house may never be sold and the money not paid back."

Councilor John Matson, however, was all for the ordinance and said it would be good for the elderly.

"It's good for the town," said Matson. "It helps people stay in their house, and, with the type of taxes we have in Hopkinton, I understand why people would want to do this. If the system we implement is broke, we'll fix it."

Acting Town Manager Linda Urso said that "this is a different approach to doing this type of thing because other towns do it differently, but this seems better."

The council will vote on the resolution at its May 15 meeting.

The proposal states that an applicant "must reside at and occupy the property for which a deferral has been requested" and that hospitalization in a health or nursing care facility is not a reason for disqualification. Applicants must file a copy of federal and state income tax returns for all persons residing in the household, a copy of proof of income for the most recent one-month period, income and expense statements, proof of residency, a deed or other evidence of land ownership and a Rhode Island driver's license or other identification.

Applications must be filed after Jan. 1 but no later than March 15 of the year following the date of assessment.