TAX NEWS - June 2010

Dallas Tax: Dallas City Council again delays plan to expand homestead tax exemption

A plan to expand a homestead tax exemption for seniors and disabled residents was tabled yet again Wednesday at Dallas City Hall.

The City Council appears closely divided on whether to grant the expansion that would cost the city about $2.6 million in a very difficult budget year.

Council member Tennell Atkins, the most vocal supporter of the expansion, moved that the council defer a vote until June 23.

 Atkins initially wanted the vote pushed to September, until City Manager Mary Suhm told him that if the council doesn't vote on the measure before July, the expanded exemption won't take effect until 2012.

Suhm has asked the council to defer or deny the expanded exemption because the city needs every dollar it can get as it deals with a $130 million gap in its $2 billion budget.

Atkins said seniors in his district have consistently told him they need the break, even though it would amount to only about $45 a year for the average resident.

"About 65 percent of people who vote for me are seniors. I'm speaking for my district and those seniors," he said.

Council member Steve Salazar, who also supports the expansion, said the council owes it to seniors and the disabled.

"The seniors of Dallas in this situation were given the word of the council that we would [expand] their exemption. Last year, we said we're not going to do it. We've been biting this bullet so many years now, there is no more bullet," he said.

Under the proposal, the current homestead exemption of $64,000 would be increased to $70,000 for residents 65 and older and for disabled residents. That exemption is in addition to the homestead reduction all homeowners receive.

Council member Jerry Allen countered that losing $2.6 million in tax revenue would be more harmful to seniors than deferring the exemption expansion.

He pointed to a major grant that depends on the city paying $120,000 in matching funds.

The grant would aid with senior medical transportation, but it might be lost because the $120,000 in matching funds is not funded in next year's budget, he said.

"These dollars are so precious, we have to really watch what our hearts would like to do but do what our minds tell us we ought to do," he said.

Atkins and Salazar both said they could agree to putting off the tax reduction, if they could be guaranteed that the $2.6 million seniors and the disabled will contribute to the city's coffers would be returned to them through social programs.

Bert Holmes, a member of the city's senior affairs commission, said he is not optimistic the council will grant the exemption on June 23.

Holmes has said he is concerned not only that the city will again delay the plan to increase the total exemption to $70,000 this year, but that the delay will set back a long-term plan to expand the exemption to $100,000.

Every little bit helps for people who are on fixed incomes, he said.

"You try living on $500, $600 or $700 a month. There are desperate kinds of folks," he said.