Seniors in Delaware may save an additional $350 in school property taxes next year under a bill that drew lots of discussion in the House Education Committee Wednesday.
House Bill 29, sponsored by Rep. Kevin Hensley, R-Odessa, increases the Senior Real Property Tax credit to $750 from $400.
That’s will counter a raise put in place by the Appropriations Bill for fiscal year 2023, decreasing the credit from $500 to $400.
“With inflation and a lot of our seniors on fixed income, we may say that $350 doesn’t mean a whole lot,” Hensley said. “Well, I’ve heard from 520 of my seniors, and they still come in on a petition I sent out. It means something to them.”
Every legislator has people in their respective district who would benefit from the tax break, he said.
Hensley said residents have shared concerns with him about the ongoing statewide property reassessments, with the assumption that the discount would be more beneficial to those in New Castle County than in Kent and Sussex counties, based on the number of people who would qualify from the exemption.
“I would respectfully suggest that once reassessments are done, I think all of us suspect that that’s likely to result in significant (property value) increases, particularly with our friends in eastern Sussex County,” he said. “So whereas they may not be eligible today, with reassessment, they may very well be eligible.”
If HB 29 passes, it would cost the state $8.7 million in fiscal year 2024, $9 million in fiscal year 2025 and $9.3 million in fiscal year 2026, according to the bill’s fiscal note.
“I’m clearly aware of the fact that the bill has a fiscal note, and I think we all need to understand that it will go to appropriations,” Hensley said. “If there’s money to fund it and it’s the will of the committee, great. And if there’s not, there’s not.”
Regardless, Hensley said, it’s appropriate for the committee to evaluate the tax credit recognizing the value that it has to a lot of Delawareans seniors, and if the funds allow it, the tax break should come forward.
Rep. Mike Smith, R-Pike Creek, said many of the seniors in his district didn’t even know they had the option to apply for the tax credit.
Those that do know about it, he said, have asked him consistently why the state has not raised the amount.
“In an inflationary period, this is a good thing to do for seniors who are always on a fixed income,” he said, “and that fixed income in inflationary periods is worse.”
A House Democrat who has called for several tax credits to be based on the assets and wealth of an individual did so with the senior property tax Wednesday.
“One thing that really gives me heartburn about this bill is the fact that it’s not means tested,” said Rep. Eric Morrison, D-Glasgow. “We’re increasing this tax credit by 50% but it’s not means tested.”
The tax credit should go to those who need it most, he said.
“When I knock on doors in my district, I knock on the doors of seniors who are doing very well, and then I knock on the doors of seniors who literally break down into tears to explain to me that they’re cutting their medicines in half or their pills,” he said, “and they’re trying to decide, ‘Do I eat or do I take my medicine or do I pay my utility bill?’”
He said he didn’t know if he could support the bill without it being means tested.
Means testing would require the state to hire staff to carry out the process.
All 12 voting committee members decided to release the bill to the House floor on its merits. An on its merit vote means the legislator thought the issue should be debated by the House, but didn’t want to be on the record supporting or opposing the bill.
“We’re going to have so many folks who are getting more money that they don’t need to survive,” Morrison said. “That money should be going, I think, to seniors who are really struggling.”
Hensley agreed that the tax break won’t make or break a lot of seniors, but it might for those who are struggling financially.
“I would more than entertain working…on putting in a means test,” he said. “I don’t have an issue with that at all.”
Hensley said means testing did not come up in his discussions with the governor’s office.
It makes more sense to him to have the means test mandate as a separate piece of legislation, he said.
Morrison pointed out that he doesn’t want a means test to result in some seniors getting nothing.
Rather, he wants a sliding scale, where seniors would get a tax break indicative of what they financially need.
Rep. Sophie Philips, D-Christiana, wanted to ensure that school funding would not be impacted by this bill, to which Hensley said it wouldn’t because the state is taking on the costs.
Also in the hearing, House Bill 96, sponsored by Morrison, would lower the voting age for school board races from 18 to 16.
The bill was tabled at the beginning of the meeting, but will be added back to the committee’s agenda in the future, said Rep. Kim Williams, D-Marshallton, who is chair of the House Education Committee.
Raised in Doylestown, Pennsylvania, Jarek earned a B.A. in journalism and a B.A. in political science from Temple University in 2021. After running CNN’s Michael Smerconish’s YouTube channel, Jarek became a reporter for the Bucks County Herald before joining Delaware LIVE News.
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