WILLIAMSTOWN, Mass. — The Select Board on Monday voted, 3-1, to implement a means-tested senior property tax exemption that town meeting approved last May.

 

The annual town meeting overwhelmingly supported the home rule petition, which was waiting on approval from the legislature and the signature of the governor before the local property tax relief plan could be put into action. The town learned in January that it had the go-ahead.

 

But one member of the Select Board argued that the panel should hit pause on the plan because of unintended consequences that actually could hurt the seniors it is meant to benefit and because the implementation could result in the town wasting its own resources.

 

Both problems are linked to how the local exemption would interact with the existing Massachusetts Senior Circuit Breaker Tax Credit.

 

Stephanie Boyd argued that the state program is a better deal for seniors and that, as currently written, the local program could prevent Williamstown homeowners from taking full advantage of the state circuit breaker every other year due to what town assessor Chris Lamarre called the "seesaw effect."

 

Boyd gave her colleagues a lengthy presentation with her analysis of why the local exemption approved by town meeting last year is flawed and how it could be amended at this May's town meeting to fix the bug before the board puts the scheme into action.

 

She explained that the state program is designed to make sure that income-eligible seniors do not pay more than 10 percent of their annual income in property taxes by giving them a rebate to get them as close as possible to that 10 percent level.

 

The local provision passed last year allows Williamstown to match that rebate at a level to be determined annually by the Select Board — shifting some portion of the property tax levy away from income eligible seniors and onto residential taxpayers who are more able to pay.

 

It is an idea that Boyd and the rest of the Select Board supported last spring. But she said that recently her research showed that the local program might not work in practice the way its framer, former Select Board member Andrew Hogeland, intended.

 

"What happens is if you receive from the state a rebate that gets you to 10 percent, and the town matches, you now pushed the cost of your tax below 10 percent of your income," Boyd said, explaining the seesaw effect. "The next year, when you apply, the state will ask if you had any rebates on your tax. If you say yes, the state then reduces the amount that it gives you.

 

"Then, since the state has reduced their rebate, the state has to reduce their rebate because it's proportional to that. And the next year you go back and you get more money because, overall, you had a smaller rebate. And back and forth."

 

In addition to making life more complicated for the town's taxpayers, over time the interplay of the state program and local exemption would result in more local tax dollars spent than necessary to achieve the tax relief Williamstown voters want to give.

 

"At $60,000 income, after 10 years (not adjusted for inflation), the net benefit would be $321 to homeowner, at a cost of $3325 to the town," Boyd wrote in response to an email seeking clarification on one of her comments at Monday's meeting. "This happens because the state considers what the homeowner actually pays in taxes and will deduct any rebates before it calculates your tax/income ratio."

 

There is a solution, she told her colleagues on Monday.

 

"At least a half dozen, if not more, of these communities have included a clause in their home rule petition that they will only reduce people's taxes down to 10 percent of their income," Boyd said. "And if you do that, you'll minimize this back-and-forth where the state pays one year, and the town pays the other year."

 

She said town meeting could pass an amended version of the local tax exemption this May and send it to Boston for re-approval. Or the town could wait until a similar local-option legislation — that does include a cap to prevent the seesaw effect — passes on Beacon Hill and is signed into law and adopt that program.

 

Lamarre, the town assessor, told the board that the interplay between the the state circuit breaker and a local tax exemption is an issue for seniors in the about 20 communities that have implemented a local program and that the seesaw effect is a topic discussed by his colleagues in other towns that are weighing the idea.

 

He said seniors may want to consult a tax professional before applying for the local exemption because of how it could impact their circuit breaker rebate.

 

Lamarre did not dispute Boyd's analysis, but he also said repeatedly that the policy decision of whether to put the local exemption into action is up to the Select Board. He also said the town cannot get the kind of data on individual taxpayers to figure out how implementation would impact specific seniors before the program goes into effect.

 

"That's one of the things that a lot of my colleagues had indicated," Lamarre said. "Unfortunately, you have to jump in the water to see how cold it is. … It's a tangled web: How do we best help our seniors? I would say that ball is in your court."

 

Lamarre also referenced a concept associated with Enlightenment philosopher Voltaire.

 

"I would say we really can't let perfect get in the way of good, and, perhaps, we can do some analysis about what levels will best suit our seniors," he said.

 

Select Board Chair Jane Patton referred back to that statement by Lamarre later in the meeting and argued that the board should not hesitate to put into effect a tax relief tool for seniors that town meeting approved last year.

 

"My challenge is we don't know that one way will be better than the other way," Patton said. "There's opinions — but there's no more real factual, 'This is absolutely not the best way to go.' I really defer to [Lamarre]. If Chris stood up there and said, 'This is crazy, you shouldn't do it,' I'd say OK.

 

"[He] said it was OK starting and learning and seeing where it goes. Then if we want to modify, we can modify. ... We're in no way locked into this forever."

 

Patton said she did not want the board to get "bogged down" in analyses of how the program might play out before taking action to help income-eligible seniors as soon as possible.

 

"We cannot keep saying we want to help people and then not move forward in some form or fashion," Patton said. "That just jams me up in a big way."

 

Boyd countered that the town could help seniors more by making sure that everyone who is eligible for the state circuit breaker rebate pursues that tax relief measure.

 

"I was recommending we do something to help people, and that's communicate about the programs that exist, that work well, that people aren't taking advantage of now," Boyd said. "And they, in fact, can't take advantage of this program until they take advantage of the state circuit breaker.

 

"And the other thing I was recommending was that we modify this [local] program. I don't think that's doing nothing. I think we can make a bigger impact on our lower-income seniors by promoting the state circuit breaker."

 

Randal Fippinger confirmed with Boyd that she thinks adding a cap provision to the local program would solve the "seesaw" problem and then added, "In a best-case scenario, the seesaw effect would only happen for one year."

 

Patton was quick to agree with Fippinger.

 

"I don't like inefficiency," she said, nodding to Boyd's analysis. "I also don't like getting paralyzed making something perfect when we have an opportunity to learn and there seems to be a fairly decent fail safe, highly possible, that we can avoid the seesaw thing."

 

The board ultimately voted to put the local tax exemption into effect with the two variables that the bylaw requires the Select Board to address each year: the percentage match of the state rebate per recipient and the maximum benefit that could be distributed among all participating seniors (and shifted onto nonparticipants in the residential tax pool).

 

The board decided to go with the "conservative" 50 percent match that Hogeland had recommended to try the program out and set a cap at a maximum of $100,000 to be redistributed in the levy.

 

Fippinger, Patton and Matt Neely voted to go with that implementation. Boyd voted no. Jeffrey Johnson did not attend Monday's meeting.