Request for the Approval of Petition to Enact Legislation Authorizing the City of Melrose to Establish a Means Tested Senior Citizen Property Tax Exemption in the New Amount of 100% of the Circuit Breaker Income Tax Credit.

Transcript (~8 min @ 38:40)

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▶ 38:37 Mark Garipay: Recommended a plead placed on file. Um, next up is, uh, ID 1 2 4 0 3. The request for the approval of Petition to Enact legislation authorizing the City of Melrose to establish a means tested senior citizen property tax exemption in the amount of a hundred percent of the circuit breaker income tax credit.

▶ 39:06 Mark Garipay: Ms. McClellan, the floor is your still.

▶ 39:09 Speaker 2: Okay. Thank you. So this evening we're also looking at, um, options for reestablishing the senior means tested property tax exemption, also known here as the Senior Circuit Breaker tax exemption, which we have had in place in Melrose for the past three fiscal years. The current act is automatically repealed three years after its implementation, which is at the end of this fiscal year 2025. So without action by the city council and or the legislature, the program will not be able to, um, available to Melrose residents in fiscal year 2026. So in the handout, um, that you should have received this evening, um, I have included some notes about the program, which I will, uh, walk through quickly here. So the senior means tested exemption. It allows the board of assessors to qualify senior applicants for tax relief by a state income tax credit, referred to as the circuit breaker credit. Under the current legislation, qualified applicants receive a property tax exemption equal to 150% of their state circuit breaker income tax credit, the total amount of exempted value is to be allocated within the tax levy or shifted to non-eligible residential only taxpayers. So how it works is, um, the seniors qualify for and receive the senior circuit breaker credit on their state personal income tax return. It's their CB form, they file CB one form. Um, and I, I added the qualifications for the, um, circuit breaker at the state for the state, um, income tax there, like for you. Um, there's just income qualifications, uh, for that. Um, and, uh, the Melrose Board of Assessors then uses that mass circuit breaker state tax credit, along with several other qualifications, um, of domicile and ownership to qualify the Melrose Seniors for real estate tax exemption, then equal to one and a half times the amount of that credit. And then I provided the summary of that program here for the past three years. The number of exemptions, um, granted the amount in dollars granted, and then the tax rate impact for each year. So the history, um, is that in March of 2021, the Melrose City Council voted to adopt the measure here at local level. In July of 22, the governor signed the bill, our bill, H 3 70 66, into law. So fiscal year 2023 was the first year of implementation of our, um, circuit breaker exemption. Uh, in October of 2023, we had Massachusetts State tax re relief legislation passed. It doubled the circuit breaker tax credit with added cola, and so it brought the maximum credit to 25 90 from 1200 the previous year. So there's a ty one, this next line here, but, um, Melrose, the real estate exemption for fiscal year 25 at the 150% was $3,885 for the circuit breaker, um, exemption in Melrose. So they received it on their income tax, then they got the 38 85 on their, uh, real estate exemption. And then the, the next line is basically, like I had said before, it's automatically repealed as part of the legislation. And that's everywhere. Every community in the state that has it has that three year repeal. It's recommended by, um, it's just a recommendation that everybody has it. Um, uh,

▶ 43:24 Speaker 2: so the considerations here are that, um, in addition to that, the senior circuit breaker real estate tax exemption that we're speaking of, um, eligible seniors are able to also receive the 41 c, the senior real estate tax exemption, which is a statutory exemption, and that's a thousand dollars. And now they can also, they can participate in the senior property tax work off program, and that now has an exemption amount of up to $2,000. Um, what's important to note here is, um, what I call the Seesaw effect with this circuit breaker credit. So, for eligibility for the circuit breaker tax credit on the income tax at the state level for Massachusetts, so for your property tax payments together with half of water and sewer expense, they have to exceed 10% of the taxpayer's total mass income for the tax year. So because the circuit breaker tax credit eligibility is based on the real estate tax payments, when the exemption amount becomes too high, it causes ineligibility for both programs, um, for some applicants in succeeding years. So some years they'll, they'll get it, and then they will not pay enough in real estate tax, which causes them to not be eligible for it at state. And then they can't get it at Melrose in Melrose for that year, but then the next year they'll get it. This is, this happens for some applicants, and we've had numerous complaints about that because, and it's just the way that it works with eligibility. Um, but some applicants because of their income are just eligible every year no matter what. Um, and then I just added a note here that, um, the Municipal Empowerment Act, which is still, um, moving through the legisl, the state's legislative process, um, does contain a provision, um, for this kind of senior means tested exemption to be included as a local option for all cities and towns in Massachusetts, instead of having to each city and town go to the legislature on their own to get this, this, um, information or to get this passed.

▶ 45:51 Speaker 2: I'm sorry. Um, so basically, um, excuse

▶ 45:54 Mark Garipay: Me, Ms. McClean, I think we need to recess into legal and ledge. Mm-hmm. Um, and then, then come back. Okay. Um, I didn't want to cut you off, but, um, no, I understand. So I'll, I'll, I'll let Mr.

▶ 46:05 Robb Stewart: Chair, I I'll make a motion to recess.

▶ 46:08 Mark Garipay: Second. Motion to recess by Council Stewart, seconded by, uh, president Elli. Uh, can we take a roll call vote on that.

▶ 46:16 Speaker 8: I just, I, discussion

▶ 46:24 Speaker 1: Councilor Jamine? Yes. Councilor Pinocchio. Councilor Hamilton? Yes. Councilor Karen Chetty? Yes. President Moore? Yes. Cremsky Councilor Romanul? Yes. Councilor Stewart? Yes.