Taxes Driving Some Elderly From Their Homes

ARVARD, Mass. — St. John Lane, a rural road here lined with colonial-style houses, is named after the family of Shirley St. John's husband. But soon, there will be no more St. Johns in Harvard. Mrs. St. John, 62, a widow, will move, no longer able to afford the rising property tax.

"It's sad," Mrs. St. John said in the modest Cape Cod that she and her husband, Paul St. John, built 41 years ago as newlyweds. "Paul and I put our souls into the house."

The two-bedroom house in Harvard, a town of 1,200 people about 30 miles northwest of Boston, was assessed at $173,000 in 1996 and $289,000 this year, and the property tax bill grew to $3,500 from $2,200. With an income of only $12,000 a year from Social Security and a pension, Mrs. St. John needed help. Luckily for her, her town offered some: a program that allows elderly people to work $500 off each property tax bill.

Mrs. St. John's task was entering computer data for 75 hours last fall. But this year, Mrs. St. John is giving up. She is afraid of depleting her savings, so she has decided to sell the house this year and move to Iowa, where she was born.

Soaring prices have brought greater values to homes throughout the Northeast. At the same time, states have begun to reassess property more often, so taxes are reflecting the actual value of homes. This has created large, sometimes unbearable, tax burdens for many longtime homeowners like Mrs. St. John.

Several towns in the Northeast have been looking for creative ways to make property taxes less onerous. At least three towns have adopted programs like Harvard's, allowing older people to work off part of their taxes. Some towns have increased tax exemptions for the elderly. Others have allowed older people to postpone paying part of their taxes until they sell their property.

But many other cities, facing diminishing aid from state governments, say they cannot afford such programs. State aid to towns has decreased as much as 30 percent since 2001, according to the National Association of Towns and Townships.

In better times, towns could lower tax rates when houses rose in value and still have enough revenue. In recent years, though, tax rates have remained relatively constant in many Northeastern towns while budget demands have not.

"For the older people, their homes are rising in values, but their income is not rising," said Amy Crews Cutts, an economist for Freddie Mac, a federally chartered company that is one of the main buyers on the nation's secondary mortgage market. "But you cannot eat your house."

The problem of fast-rising property taxes has been especially acute in the Northeast, one of the two hottest real estate markets in the nation, said economists who study housing. The other strong market is in California, but that state's Proposition 13 strictly limits increases in property taxes.

Nicholas P. Retsinas, the director of the Joint Center for Housing Studies at Harvard University, said, "Our study finds a large number of elderly people who pay over half of their income on housing-related costs, even though they have paid off the loans on their homes."

Those costs are mainly property taxes and maintenance. Mr. Retsinas said about two million Americans, old and young, were in this situation, but the average person was white, retired and living in the Northeast.

The average house price has risen by 76.5 percent in New England since 1995, the highest increase in the nation, according to Freddie Mac. The Pacific region, including California, Oregon and Washington, is second, with a 64.1 percent increase. The national average is 49.1 percent.

The assessed value of the house owned by Donald Dextradeur, 74, and his wife, Josephine, 76, in Branford, Conn., on Long Island Sound, jumped to $380,000 last fall from $200,000 in 1995. The property tax bill will be $5,100 this year, a 22 percent increase from 2002. The Dextradeurs, who say they receive $18,000 annually in Social Security and other retirement income, have pleaded with the town tax appeals board to freeze their property tax at the 2002 level.

"I worked hard for this house," said Mrs. Dextradeur, who was a nurse and said she sometimes worked double shifts before she retired at 67. "Now I think I should be able to enjoy the house and stay here until the end."

Officials of the Town of Harvard say the town values its elderly residents. But Harvard's budget allowed only 12 families to pay part of their taxes by working. The future does not look rosy, said Evan Katz, the town's finance director. In January, more than halfway into the fiscal year, the State Legislature cut $215,000 from its aid to Harvard, and the state is expected to reduce aid 10 percent more in the next fiscal year.

Harvard's spending, on the other hand, has grown, Mr. Katz said. The state, for instance, used to pay for special education. Now the town pays.

Older residents here are angry at the state and federal governments, which they say are too quick to spend.

Mrs. St. John has struggled to pay her tax bills by taking odd jobs, like running a flavored-ice machine by the town's pond in the summer and collecting tickets at basketball games in the winter. Moving to Iowa will be a relief financially, but it will hard emotionally.

"My husband and I put on the wallpaper," Mrs. St. John said, trying to hold back tears. She met Mr. St. John when they were in the Navy and moved East with him when they were discharged.

"We designed the cupboards; he made the coffee table; we built the whole place."

A few towns with bigger cash cushions are doing more to help the elderly. In Cumberland, R.I., a town of 30,000 near Boston, for instance, residents older than 72 are allowed to pay property taxes at the 2002 level and pay the excess when their houses change ownership.

Narragansett, R.I., where housing prices have soared because of an influx of people from New York and Boston looking for summer houses, has granted exemptions of up to $1,500 to people 65 or older with incomes less than $30,000 a year.

Some tax experts applaud the efforts to provide tax relief but warn against following California. That state's Proposition 13, passed in 1978, limits property tax increases to 2 percent until the property changes hands. Scholars say the measure has lowered California's ranking in educational spending per student. California consistently ranked in the top 10 before Proposition 13 passed. It ranked 27 in 2000, according to the Department of Education.

Options exist for the elderly who want to remain in their homes. One is a reverse mortgage. The bank pays the borrower a certain amount of money periodically, and the borrower pays the bank back when the property is sold. But many older people are reluctant to encumber their houses, said Ms. Cutts, the economist at Freddie Mac.

Mrs. Dextradeur said: "I went through the Depression as a child. I saw my parents struggle. I cannot afford more loans, and I am not going to take out a loan unless it's absolutely necessary."

I'm not sure about other states but here in Michigan the majority of our property tax is for the public school system (read 'teachers'). Salaries increase... and education decreases.

Here in Texas, our increases are caused by the influx of illegal alien children that need special education, meaning more teachers and teacher's aides that need to be hired.

I don't think teacher's salaries are all that high here in Texas. That is not saying many, many teachers are not overpaid!! - and let's don't even talk about administration - and little things like coaches, especially football, that make more than a teacher.

I don't understand how the various states do their taxation - but if the lady in the story lived in our town, state, county, etc., with a house valued at $289,000, her taxes would be 9,800 a year - not 3,500 and the exemption for being 65 and over is only 10,000.

Texas is going to have to do something this year - I am just holding my breathe - but the two areas that are costing the most are education and healthcare - which are the two areas that are impacted the most by the illegals.

your assessed tax value cannot be raised higher than the inflation rate.

I don't suppose we have addressed anything regarding taxes here in Texas.

Do you mean inflation as in the 'rate of inflation' the government puts out?

Current local inflation rate........about 2 to 3 percent over the last ten years.

The law was changed here since Michigan has a lot of lakes and retirees with lakefront property were getting hammered with fixed incomes and skyrocketing property values.

We're in a similar bind here in St. Louis. Property taxes are dedicated entirely to the local public school system - a swamp of violence and P.C. infection that passes for diversity and progressive learning. Most homeowners who live in the one/third of the city that supports the other two/thirds send their children to private or religious schools. At the same time, our regularly increasing property taxes are gobbled up by the very same educational system that forces us to spend $7,000 a year to keep our son out of it. I'm sure this is entirely unrelated to our poor schools and high taxes, but the 28-person Board of Aldermen is comprised of 27 Democrats and one Independent. The mayor is a Democrat, as well. Not a Republican to be seen in a 350,000 resident city. (St. Louis also seizes one percent of every dollar its residents earn. Never a moment's respite from the tax machine.)

The two-bedroom house in Harvard, a town of 1,200 people about 30 miles northwest of Boston, was assessed at $173,000 in 1996 and $289,000 this year,

Out to the curb with $300,000.00. If this was the requirement for all elderly folks when they become homeless, the line would stretch around the world.

She is afraid of depleting her savings...

Women are driven by vague fears. Mrs. St. Johns is fully capable of working at age 62, yet she is lazy and won't, content to draw social security based on the fact that her husband worked. Most of our societal medical gyrations consist of very expensive efforts to keep grandma and grandpa "independent" and in a homestead for what? I have no sympathy at all - there comes a time when they need to sell if their vague fears and unwillingness to draw down on assets overcome their rationality and inclination to pay their bills like everybody else.

Just an aside... In Cumberland, R.I., a town of 30,000 near Boston,...

LOL...Cumberland is about 55 miles South of Boston.

That's considered "near"?

Gotta love the NY Times...

I'll add this - as a 62 year old widow content to rob younger workers for the duration of her parasitic existence on earth, I'll bet Mrs. St. Johns never saw a Democratic politician she couldn't vote for either locally or nationally. Now, on to the next:

Mrs. Dextradeur has a tremendous entitlement mentality. Property values in those areas have skyrocketed - a benefit to her and those like her for the purpose of sale, for home equity loans, you name it. Yet she doesn't want to pay her share based on her gains because she is (can we all pathetically sing in unison here?) ooooooold.

Achieving longevity is great. In this country, being old (and that generally means old women because of demographics) means that everybody else heavily subsidizes your medical bills, that you draw out far more in social security than the working person in your life ever put in, that you get discounts at pharmacies, movie houses and restaurants, and pretty much have a free lunch from one end of America to the other.

Like I said - parasites, always angling for a better grip on the host.

...In Cumberland, R.I., a town of 30,000 near Boston, for instance, residents older than 72 are allowed to pay property taxes at the 2002 level and pay the excess when their houses change ownership...

Considering that we are having a walk-through re-assessment next year, and taxes will skyrocket once again, I'd bet most people who take this deal will find they have zero profit when they sell.

90% of Rhode Island government is wasteful and redundant. Also our teachers are paid in the top ten percent of the country with I think, the second or third worst results.

In six years, my own Cumberland property taxes have gone from 3500 to 11,200. Utterly wasted money.

Mrs. St. Johns is fully capable of working at age 62, yet she is lazy and won't, content to draw social security based on the fact that her husband worked.

Spoken like a true bureaucrat...Just because her taxes go up 50% each year is no reason for her to complain. She should work as many jobs as necessary to compensate for the town's inability to control its spending.
Which branch of the government do you work for again?

I don't - I'm just sick of seasoned citizens driving up the costs of government then whining about having to pay their fair share of it. Remember - that is a formidable, whiny, democratic, entitlement minded voting block.

Maybe you'd like to see what happens to the tax bills of the productive when the geezers get a freeze in their rates, yet vote themselves all kinds of goodies.

I know! We can just pass a decree saying that old people never have to pay anybody for anything, and get what they want 100% of the time! What a boon! < /sarcasm >

Be still your tongue...

How dare you introduce a voice of reason into this pathetic pity party!

I like the idea about just giving them whatever they want for free...then they wouldn't have to go through the trouble of having to pay the AARP to bribe all the politicians to give it to them.

Double bonus!

Plus, it would save me pulling out my hair every time they vote just a little more money out of my pocket. Vote it all out at once. At least then I would know where I stand.

LOL

Col Sanders

I really don't know about the entire state - but this is sort of in the middle of nowhere - small town - almost the geographical center of Texas.

Taxes were high in NE Texas when we lived there also. Of course, in Texas, the school taxes are somehow divided with out 'less fortunate' school districts in Texas. This happened quite a few years ago when the border school districts were going broke. There was some talk of suing the federal government for failure to maintain the border and allowing illegal immigrants here for the school districts to educate. Don't know how the lawsuit came out - but a short time later, a law was passed in the Texas legislature that school districts had to 'share'. Therefore, it doesn't matter what kind of school you are willing to finance, or if you want to live where there are few illegals - you will pay for them in the state of Texas anyway.

We have prop 2 1/2 in Mass, we took away the independance of the school boards to raise taxes to support government schools, if these old people have a problem evict their Selectmen, fire the government.

The A$$holes in my City had a prop 2 1/2 over ride measure on the ballot for 59 million to support our failing schools, FLUSH, our Idiot mayor and his toadies were in tears when the count came in 70-30 against, best time I ever had at City Hall, snivviling jerks, it is for the children, puke.

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