The League of Municipalities opposes SCR-120, and its companion measure, ACR-202, which would unfairly burden municipal budgets and most local property taxpaying citizens and businesses.
If approved by both Houses of the Legislature, in accordance with Constitutional requirements, and ratified by the voters at the November election, this proposal would amend the State Constitution to freeze property taxes on the primary residences of all homeowners who are 65 years of age and over.
Under the amendment, this property tax freeze would take effect once the homeowner turns 65 years of age or once the home is acquired by a person 65 years of age or over. If a homeowner is already 65 years of age or over at the start of the next year after the amendment is approved, the property tax freeze would take effect that year. A homeowner would have to apply each year to continue the property tax freeze. In the case of ownership by spouses, only one of the owners would have to meet the age and residency requirements in order to apply for the property tax freeze.
Currently, by statute and not by the Constitution, homeowners 65 years of age and over are responsible for paying property tax increases on their primary residences. Some of these homeowners are eligible for a reimbursement of their increased property tax payments, if they meet certain income requirements. This amendment would allow all homeowners 65 and over, regardless of income, to have their property taxes frozen, and would mean that homeowners currently receiving reimbursements for property tax increases no longer have to pay future increases up front.
The property tax freeze under this amendment would continue if the property is transferred to a surviving spouse who is 65 years of age or over, so long as the surviving spouse uses the property as their primary residence. The freeze would end upon the transfer of the property to any other owner or upon the property no longer being used as the primary residence of a qualifying owner, at which point the property would be subject to ordinary assessment and property taxation.
Because the proposal does not require the State to reimburse the homeowner’s municipality, we oppose SCR-120 and ACR-202.
The revenue denied as a result of the freeze would only burden the municipal budget. The school district and the county, as well as any special districts, would still be entitled to 100% of their levies. Unless amended to ensure State reimbursement of municipal losses, the revenue shortfall would be reflected in local purposes levy and subject to the 2% tax levy cap. The difference would need to be covered by all non-senior residents and by the business community in the municipality. It might also denigrate the quality of other municipal services, to ensure the municipality stays within the 2% property tax levy cap.
Respectfully, we must oppose SCR-120 and ACR-202.