House advances tax break for elders

Thousands of Massachusetts seniors would be spared from property tax hikes approved by voters in cities and towns under a bill that moved forward on Beacon Hill yesterday.

Under the measure, cities and towns whose voters override Proposition 2 1/2 would be able to exempt certain seniors from the tax increase. The House gave preliminary approval to the proposal yesterday, but it still must win a final vote in that body and clear the Senate. Governor Mitt Romney has not yet taken a position on it.

The bill, which Acting Governor Jane Swift vetoed two years ago, would apply to senior citizens who currently qualify for tax credits under the state's so-called circuit breaker provision, which is designed to cushion older people on fixed incomes from rapidly rising real estate taxes.

Under that two-year-old law, seniors who have annual incomes of less than $43,000 and who own residences worth $432,000 or less can qualify for credits of up to $810 on their state income taxes. About 12,000 people received a total of $32 million in credits last year, the state Department of Revenue said.

Under the bill, cities and towns could also develop different eligibility criteria, as long as the income thresholds don't exceed those in the circuit breaker provision.

Under Proposition 2 1/2, a community's total revenues from property taxes cannot increase more than 2.5 percent from year to year, excluding new construction. However, state aid cuts have led cities and towns to ask voters to override the limit.

According to a recent report by the Massachusetts Taxpayers Foundation, 39 communities voted to override the annual property tax limit in 2003, approving a total of $48 million in new revenue. That amount is twice as much as what was adopted in 2002 and more than six times the average between 1994 and 2000.

"This probably makes sense, as long as it's local option, as another way of dealing with the need for property tax increases with cuts in state aid," said Michael J. Widmer, the foundation's president. "This is a way of saying: `We may need the override because we need to pay for basic town services. But at the same time we recognize that there are limits, for some seniors in particular."

Seniors are generally viewed as resistant to Proposition 2 1/2 overrides. Those who live on fixed incomes are heavily burdened by property tax hikes, and those without children or grandchildren in local schools aren't necessarily interested in paying for them. By effectively sidelining seniors, the proposal might make it easier for communities to pass overrides, though other property owners would have to be persuaded to pay more to pick up the slack.

House Ways and Means Committee chairman John H. Rogers, a Norwood Democrat, said the bill "seeks to allay the inevitable strife that exists between older taxpayers on fixed or low incomes and younger taxpayers seeking to make capital improvements in their community." "Many of these overrides are for new schools," said Rogers, who expects the House to approve the bill as early as today. "You have a civil war between older citizens and younger citizens with children in the schools."

Citizens for Limited Taxation, a group that opposes property tax increases, urged lawmakers to keep their "hands off Prop 2 1/2."

"The intent of this bill is to keep seniors from voting against overrides," said a statement issued by the group. "Without their help, other taxpayers could lose their battles against higher property taxes and then would have to pay the seniors' share of the higher burden, too."

Geoff Beckwith of the Massachusetts Municipal Association, which lobbies for cities and towns on Beacon Hill, said his group has not had time to evaluate the proposal. Beckwith said that he isn't sure whether seniors are more likely to oppose overrides, but that there is little doubt that they tend to be hurt by them.

"The property tax is a regressive tax, and people on fixed incomes -- primarily defined as senior citizens, who tend to own homes -- are particularly vulnerable," he said.

In Sudbury, where voters passed a Proposition 2 1/2 override two years ago, residents have already petitioned the Legislature for tax relief for seniors. The request is still pending on Beacon Hill.

Ralph Tyler, a 60-year-old Sudbury resident who has been pushing for the tax break, said the proposal has more to do with the town's economic self-interest that it does with charity.

"We have a continual exodus of seniors," Tyler said. "If we provide a significant incentive, we think we'll retain enough senior citizens that every taxpayer will benefit, because senior citizens don't cost anything for the town."

Scott S. Greenberger can be reached at greenberger

@globe.com.