There is consternation and misunderstanding resulting from the tax exemption application mailed to many of you, and you deserve an explanation. 

The fullest explanation you will get will be at the meeting of the Ad Hoc Tax Exemption Committee on Oct. 16 at 7 p.m. in the council chamber. For those not able to attend, these explanations may help you understand why you've been asked to disclose your income to the tax assessor. The bottom line is this: We’re trying to find ways to provide additional tax relief to those with the greatest need.

What’s happening to tax exemptions?

Residents voted to substantially increase the budget this year, largely due to the middle school construction project, resulting a tax increase well beyond those seen in recent history. In response to a number of residents asking what could be done to offer relief for older residents, the town council appointed a committee to look into the issue.

The Ad Hoc Tax Exemption Committee has seven volunteer voting members, five of whom are seniors (one of whom is also a veteran). It’s the committee’s job to make recommendations to the council for improvements to the tax exemption system. 

The committee is required to provide cost estimates for any recommended changes. The council felt that, if it was to grant some new tax relief, it should have a clear sense of the cost of doing so. 

Right now, about $550,000 of taxes are reallocated annually to provide for elderly and disabled exemptions, and there are about 1,000 households in Barrington who receive these exemptions. Changes to the exemption system could result in unanticipated consequences for the other 5,000 households that receive no exemption. 

In order to pay for tax exemptions for those 1,000 households, the 5,000 non-qualifying households pay an average of $110 annually. If we are considering providing additional tax relief, we need to understand the potential increased burdens on those non-qualifying households.

Why does the town need to know my income?

The tax exemption committee is in general agreement that income is, in most circumstances, the best way to determine how much help a resident needs to keep up with the tax increases passed by voters. 

Right now, all of Barrington’s senior tax exemptions are income based, and have been for years. If you didn’t realize this, it is because everyone earning over $28,000 per year is in a single income bracket and their exemption is a $18,400 deduction from their assessment. Today this results in a $368 reduction in your taxes. For residents with household incomes under $28,000 there are a series of substantially more generous tax credits. For example, those earning under $16,000 per year receive a $3,000 reduction in each year’s tax bill. 

The committee is hoping to extend these more generous credits to those who are struggling to make ends meet.  The income qualifying levels were set years ago and don’t reflect the higher cost of living, higher utility bills, costs of food, etc. The funds necessary to do so may need to come from changes to exemptions or eligibility in higher income brackets. Without income data, the committee would not be able to provide the required cost estimate of proposed changes.

Will I qualify for an exemption?

We don’t know. Any changes to the exemption system need to be voted on by the council and the tax exemption committee has not made any recommendations yet. The income data received will allow for consideration of options with an understanding of the associated costs. 

The goal is to make exemptions available to as many residents as possible while achieving the primary objective of offering meaningful help to residents in need. For residents making hard choices between staying in their home or paying for other necessities, a $368 tax break is a wholly insufficient token. For others, a $368 tax reduction is a hardly noticeable change in expenses. 

Through the applications received so far, the town has identified people receiving exemptions who did not actually qualify, either because their primary residence was in another state or for some other reason. Other residents were unaware that they were entitled to an additional $2,600 tax break. 

In other words, the existing system was not working very well and the applications coming in are already helping to identify the problems.

Why do you need my tax return?

Like all departments in town hall, the tax assessor is audited and needs to demonstrate that exemptions are not granted to non-qualified residents. Since exemptions are income based, applicants’ income needs to be verified.

Believe it or not, a number of residents have tried to cheat the system in the past.. In order to qualify for one of the exemptions, you need only be over 65 and have your home in Barrington as a primary residence. We have had examples of people who claimed to have multiple primary residences so that they can receive both the Barrington tax exemption, and one available to people whose primary residence is in Florida, for example.

A tax return, or other verifiable documentation of gross income, is already required for any Barrington resident who claims an exemption in the income brackets under $28,000. Similar income verification is standard practice in towns throughout Rhode Island, Massachusetts, Washington, and in New York City (to name only a few). 

Barrington’s existing ordinances (§ 168-8(A)(3)) already granted the authority to the assessor to require submission of tax returns in order to qualify for senior tax exemptions. You may not have been asked for one in the past because the town could safely assume that residents qualified for the “over $28,000” exemption you previously received. With the potential adjustment of income brackets, the assessor can no longer make income assumptions.

All the committee seeks is a chart of income distributions across the over 65 population. Tax returns and identities associated with income data will not be shared outside of the assessor’s office.

The town does not need, nor does it want, your Social Security number. Please redact, white out, or black out, that from any documentation you provide to substantiate your income.

Why the rush?

The council moved quickly to form an advisory committee to make recommendations regarding tax exemptions. There are residents struggling to pay for basic needs and they do not have the luxury of time. As a result, the committee is working as quickly as it can without disregarding its duty to act carefully. 

We hope that reforms, if any, will be in place for the fiscal year beginning July 1, 2018.

What about exemptions for veterans and disabled residents?

The committee has only had preliminary discussion regarding these exemptions. It was not necessary to accelerate the March 31 application deadline for these exemptions because adjustments to them will have more modest and predictable fiscal consequences than changes to the senior tax exemptions.

What if I do not file an application?

Whether to seek an exemption is your choice, but if you do not file an application for an exemption then you will not receive one. This may cost you a more generous exemption than you are receiving now, and it will cost the town an opportunity to make a good policy decision based upon accurate data. 

Mr. Boyajian is chairman of the Ad Hoc Tax Exemption Committee.