By Don MacGillivray
For 40 years, the Senior Property Tax Deferral Program (SPTD) has been successful and self-supporting, allowing low income elderly the opportunity to remain in their own homes, saving taxpayers from costly housing alternatives as people age. It allows low-income seniors to defer their annual property taxes until they move, die, or sell their home while staying in their own home.
In recent years though, enrollment in the program has increased and the declining housing values have raised concerns about the program’s future viability. The Oregon Legislature’s response to this temporary downturn was to remove more than 5,000 participants from the program. In addition, enrollment was capped, interest rates were raised, eligibility rules were changed and anyone with a reverse mortgage was removed from the program.
The cruelest response was to apply these changes retroactively to existing program participants.
Initially the current program participants were not given an opportunity to comment on these sudden rule changes, nor were groups representing lower income seniors and people with disabilities consulted about the changes and their impact on the most needy people receiving tax deferments. As the situation became known, protests were heard from hundreds of citizens, including vocal town meetings, frantic calls and letters from concerned constituents, and critical editorials appeared in The Oregonian and other newspapers around the state.
During the 2012 legislative session, Oregon lawmakers agreed to a temporary reprieve for a portion of the homeowners who had been terminated from the Senior and Disabled Property Tax Deferral Program. As a result 1,520 elderly homeowners were reinstated in the program for two-years. At the time, lawmakers in Salem acknowledged that this ‘lifeboat’ wasn’t big enough for everyone. Since the temporary extension period ended last November, many seniors are once again facing the prospect of foreclosure.
On the opening day of the 2013 Legislative Session, House Bill 2510 was introduced to fix the state’s Senior Property Tax Deferral Program (SPTD) to help some residents to stay in their homes. The Alliance of Vulnerable Homeowners (AVH), a grassroots group representing Oregon taxpayers who were removed from the program in 2011, believe the introduction of House Bill 2510 is a hopeful sign. It would make a number of improvements in SPTD program, including the following:
• Reinstates former program participants who were removed solely because they had reverse mortgages or had not lived in their homes for at least five years.
• Replaces the ban on reverse mortgages with a simple equity test.
• Instructs the Department of Revenue (DOR) to find out what happened to more than 2,000 participants who were dropped from the program in 2011.
• Considers the transfer of the tax deferral program from the DOR to the Department of Housing and Community Services.
All the proposed changes make a great deal of sense, says David Raphael, a spokesman and co-founder of the AVH. The additional good news, according to Raphael, is that the program’s revolving fund is healthy once again and there will be sufficient funds to cover current and future tax deferral payments, as well as to restore many of the former participants.
The self-sufficiency of the fund that is used to defer the taxes of eligible participants was the key issue in 2011 that led lawmakers to tighten the eligibility for the program.
AVH and other advocacy groups are hoping to have a full discussion of the issues with legislators this year, and are calling on the House Revenue Committee to take up the measure by holding public hearings on House Bill 2510 early in the session.
The Alliance is a statewide volunteer organization representing seniors and other homeowners in the SPTD Program. Its goal is to serve as a voice for the needs of disadvantaged homeowners, and to offer recommendations for improving the program. According to a spokesman, its goal during the 2013 Legislative Session is to make those temporary rein-statements permanent, and fix the other flaws in the property tax deferral program.
The victories of last year and the work being done this year demonstrate the power and effectiveness of senior homeowners speaking on their own behalf. It is important to mobilize the energies and political potential of the many Alliance members and their friends in every county and legislative district in Oregon.
The Alliance of Vulnerable Homeowners can be reached through their website at: www.vulnerablehomeowners.org.