Citizens for Better Government Blount County Tennessee

Some important facts are getting lost in the debate over whether to enact a tax freeze for senior citizens in Blount County. Everyone seems to be worrying about what the tax freeze will cost other tax payers. But no one has mentioned the cost of not implementing the tax freeze.

Senior citizens demand less county services than almost any other group. They do not have children in the schools. They do not require a lot of Sheriff’s services. They are not likely to occupy many jail cells.

If we don’t implement a tax freeze, some of our senior citizens may be forced to sell their property. If they do, they are likely to be replaced with younger families who require far more county services, particularly schools. If we do not implement a tax freeze for seniors and even a small percentage are forced to sell their property, the result will be higher taxes for the rest of us.

Take a look at the chart below. We have taken an actual case of a property owned by an elderly lady. Her small house and 11 acres of property have been in her family for generations. She has a very limited income and is so hard-pressed that she limits her trips to town to buy food because of rising gas prices. The chart shows that the house is assessed at just $15,700. The land is assessed at $95,700 for a total of $111,400. The tax value of her property is 25% of full value or $27,850.

To show the effect of a tax freeze, we have assumed a 10 cent increase in the tax rate from the current $2.23 per hundred rate to $2.33 per hundred. The Base Case in the chart shows that the tax freeze would lower her taxes by $28 next year. While $28 may not seem like a lot to most of us, it may be very important to someone who is skimping on food just to get by.

The second box in the chart below shows what happens if this senior decides to sell her property. Statistically speaking, the buyer is likely to be a family with 0.4 of a child in school. If this happens, the county will get the full tax on the property, but also will have to educate the 0.4 of a the statistical child. The county portion of the expense of educating a child each year is $3038. This means that the senior selling her house will raise the costs that must be paid by the rest of us by 0.4 times $3038 or $1215. This makes the $28 cost of a tax freeze for this senior look like a bargain.

The third box in the chart shows that the cost to the rest of us could be far higher, if this senior sells to a developer who builds ten more houses, valued at $150,000 each, on her property. This will add four more children to our schools. And, although the new homes bring in $8,740 in taxes, they will require the county to spend more than $12,000 in additional county expenses just for education. Of course there will be even more county expenses to cover roads, the Sheriff, etc.

Clearly the best solution for ALL the taxpayers is to give our senior citizens a tax freeze.