POLITICS

State should not equate age to tax exemptions
Some elderly better off financially than young workers

As if it were not bad enough that cities and towns are constantly increasing the property exemptions for elderly residents, now the state is trying to get into the act.

House Bill 487 establishes what it calls "The Good Citizen's Credit." If passed, it will grant a $1,000 property tax exemption for anyone who is 65 or older, has lived in the state for 10 years and has not been convicted of a felony, and that exemption will increase by $100 every year.

The proposed legislation sets no income limits or caps on the amount of assets for these individuals. It's as if simply reaching the age of 65 somehow entitles a person to a discount on his or her property taxes similar to those given at movie theaters and some restaurants.

However, there are two problems with this ill-conceived bill.

The first is that it would constitute an unfunded state mandate, which is against state law. The law requires that if the state imposes a process or procedure on a city or town, which costs that community money, the state must fund the process or procedure.

According to the 2000 Census data, 16.2 percent of Portsmouth's almost 21,000 residents were 65 years old or older. That equates to 3,384 people who, if given a $1,000 exemption each would reduce city property tax revenues by almost $3.4 million a year. And that number will only increase as more baby boomers reach that magical age.

Which brings us to the second problem: With the cost of supplying municipal and educational services rising every year, cities and towns simply can't afford to lose revenue, so money lost through these exemptions would have to be recovered from someplace else -- and that is usually from an increase in property taxes for younger, working class people.

The lack of an income or sales tax is often cited as the New Hampshire advantage, but business people will be quick to point out that having a well-educated work force plays an important part in maintaining the state's economic viability. Continuing to shift the property tax burden from older residents -- many of whom, particularly those buying the $500,000 condos that are being built all over the city, can well afford the property taxes being charged -- drives out these younger workers and puts the city's, region's and state's economic future at risk.

While it is true that there are some elderly residents of the state's cities and towns who could not afford to hold on to the homes they have lived in most of their lives without these property tax exemptions, their difficulties must be weighed against a taxation system that pushes the most productive members of the society out of the state.

It is time for municipalities to halt the escalation of elderly exemptions that shifts the tax burdens to working people, and it is certainly not the time for the state to begin to mandate that a certain class of people be given a tax break simply because its members have reached a chronological benchmark.

Shir Haberman is the business and political writer at the Portsmouth Herald. He can be reached at shaberman@seacoastonline.com