Beyond Deferrals: Essex Weighs Senior Tax Relief Additions

“While conservation remains an important goal, the continued removal of land from the tax rolls increases the tax burden on the remaining taxpayers,” said Pereen.”

The idea of giving tax relief for seniors who need it has been something of a dogged theme in Essex.  It’s a tough nut to crack, especially for small towns. 

This year senior tax relief has returned, in several ways.  And last week, as the Board of Selectmen (BOS) met to move on forming a new committee to study higher impact options for senior tax relief, one resident rose to propose broader structural changes in the form of two proposed articles for May’s Annual Town Meeting (ATM), including the wholesale repeal of the Community Preservation Act tax surcharge and eliminating an open space-for-development program in the zoning bylaw.

The demographics driving the need for solutions

In its meeting on Monday, the BOS was set to address property tax help for some seniors with two items.  First, it moved ahead with planning to create a “Senior Citizens Tax Aid/Relief Committee” that will be asked to tackle the issue. 

The proposed committee would be comprised of members from the BOS, the Finance Committee, the Assessor’s office, the Council on Aging, at large members, and potential others.  Their job?  Research options to recommend for senior resident tax relief that would be, yes, effective, but also manageable for a small town like Essex.

Ann Buckley, a board member for the Essex Council on Aging, told the BOS that financial pressure on many seniors is a big problem.   In just three short years, she said, nearly 40 percent of Essex’s population will be over age 60.   She also cited a recent University of Massachusetts survey of COA members, saying, “tax relief was probably the Number One category highlighted” in the survey’s more than 575 comments.

Essex has already implemented two direct forms of relief.  Qualifying seniors, for instance, are exempt from the town’s 1.5 percent Community Preservation Act (CPA) surcharge.  The town also has a “pay later” program under Massachusetts General Law Clause 41A, where eligible seniors can defer annual property taxes, with interest, until the sale or transfer of their home.

The second agenda item for the BOS sought to create a trust fund that could receive donations benefiting seniors and disabled residents.  Intended as Article 16 on the Warrant, it soon became clear that setting up and managing such a fund required more detail, and more study.  The BOS pulled it back from considering it for the Warrant.  BOS member Alva Ingaharro seemed to speak for her board when she said it’s clear that many seniors need help, but knowing what form that assistance would take is not so clear, at least at this point.  The proposed town meeting Warrant article was shelved for a later date.

Relief from local property taxes for seniors isn’t a foreign concept.  Danvers provides tax exemptions for qualifying property owners, including elderly residents, legally blind persons, and certain veterans.  Eligibility is generally tied to age, length of residency, and income or asset limits. 

Other towns have more creative programs.  Edgartown on Martha’s Vineyard has a work-for-relief program, as does South Hadley in central Massachusetts.  And other towns, like Lexington, have deferral programs for 60+ senior property owners who qualify that are similar to Essex. 

The challenge, town officials acknowledge, is structural, and for a town of Essex’s size, the balance can be delicate.  After all, reducing taxes for one segment must be made it up somewhere else and for small towns like Essex, that's not an easy needle to thread.

A new proposal from the audience

Navigating that delicate balance sharpened Monday when Ruth Pereen, a resident of Lufkin Street and a sitting Finance Committee member, stepped forward to propose two additional warrant articles of her own.  Both, she said, share a throughline: tax relief, “particularly for seniors.”  

It remains unclear whether she intended her articles to  make it to the Warrant by citizen's petition, or if she was asking the Selectmen to sponsor them.

Pereen’s first article would entirely repeal the town’s 1.5% Community Preservation Act (CPA) property tax surcharge, a program that is matched in part by state money and funds local projects related to open space, historic preservation, affordable housing, and recreation.   The surcharge was approved by Essex voters in 2007, initially pegged at 0.5% and increased to 1.5% in 2016.  

In recent years, CPA money has funded repairs and signage at the Spring Street Cemetery, a structure to protect an historic Fire Dept. hand pumper at Memorial Park, town landing docks work, and has been used to pave and paint Chebacco Terrace, Essex’s subsidized housing apartments.

Currently, Essex’s CPA fund holds approximately $1.2 million.

Pereen acknowledged that CPA funds have been important for town projects, but she said eliminating the surcharge it too straightforward a mechanism to ignore. 

Pereen’s second proposed article would seek to entirely repeal the “Open Space Residential Development” (OSRD) program from the town’s zoning bylaw. 

OSRD allows the Planning Board to approve clustered subdivision developments if a significant portion of the parcel — often up to 70% — is permanently set aside as open space.  The Planning Board can also approve a density “bonus” of up to 20% more units than what would be allowed in a conventional subdivision project if the developer meets certain additional criteria, such as affordable housing or more open space.

Last year’s development of 36 units on an 84.4-acre parcel of land off Essex Park Road was approved as an OSRD subdivision. 

Pereen argued that OSRD projects, because they create smaller lots, actually produce less tax revenue than if the developer had simply pursued a traditional subdevelopment plan that built over an entire parcel of land under Essex’s 40,000-sf lot requirement for single family homes.

Continuing to pull lands from taxable status projects, according to Pereen, could trigger a “musical chairs” dynamic that concentrates the tax burden on a smaller number of property owners.

She said Essex already has a substantial amount of open space — approximately 81.9% of all Essex’s land area, according to the town’s Open Space Plan — with a large percentage either already permanently protected or otherwise restricted (think marshlands and coastal areas).  

“While conservation remains an important goal, the continued removal of land from the tax rolls increases the tax burden on the remaining taxpayers,” said Pereen.

Besides, said Pereen, who would maintain roads, drainage systems, retention ponds, or water infrastructure of these newly conserved lands if ownership changes, she asked?  These are the unintended consequences of OSRD that could impose future financial burdens for taxpayers.

Janet Carlson, a resident of Apple Street, disagreed.  She pointed out that, for instance, much of the 59 acres of newly created open space at the Essex Park Road OSRD development may not have been taxable in the first place.

“I think a lot of that land is not buildable anyway,” she said.  “So that would be relevant to any discussion of tax loss, or tax savings.”

Selectman Peter Phippen asked Pereen if there was data to back her analysis.  Pereen said she didn't, but she follow up with the BOS with more information.   Phippen suggested the board also follow up by researching tax impacts in other towns with OSRD developments, such as Ipswich.

Whatever happens, the BOS has time to finalize the Annual Town Meeting Warrant before its deadline on March 23. 

The next Essex BOS meeting is Tuesday, Feb. 24.