Over-65 taxpayers have nothing to fear from school bonds

Over-65

taxpayers have nothing to fear from school bonds

It's been two years,

now, since I wrote the first of what turned out to be a

series of educational articles about taxes, and I am

indebted to The Citizen's editor for his willingness to

publish them, in the form of letters to the editor.

Many readers have told me

how much they appreciated them, and as I thank these

readers, I can but rejoice with them that The Citizen

should have been so progressive as to have allowed us, as

local citizens, to avail ourselves of our First Amendment

right of free speech. (Other newspapers think they should

have a monopoly on speech, and some think they have one

on wisdom.)

My first letter came about

in response to another citizen's letter about the sales

tax. In his letter, he expressed willingness to exchange

some property tax for a sales tax. Since the property tax

is deductible on income tax returns, and the sales tax is

not, I didn't see much wisdom in that position, and said

so. I have obviously had many other things to say since.

But there is a point I never brought up before that needs

to be brought up.

I personally know the

writer of the letter to which I was responding. He's a

personable older man, and a knowledgeable former

corporate executive, now a few years into retirement. The

funny thing about the premise of his letter is that, in

this county, many senior citizens pay no property tax for

education. Zero tax for school maintenance and

operations. Zero tax for school bonds.

The first school SPLOST

vote, in March 1998, promised to lower school property

taxes if a sales tax was adopted. But, for senior

citizens who didn't already pay it, there was no property

tax to be lowered. On the other hand, these senior

citizens would have had no personal reason to oppose the

issuance of bonds repayable through a property tax,

because they wouldn't have had to pay that property tax.

But that's not what they were asked to vote on then.

All of this leads me to

think that many people (starting with the school board)

could benefit from reviewing the tax situation for our

senior citizens here in Fayette County. So here's the

story.

In Georgia, we have general

laws and we have local laws. The general laws apply to

everyone in the state and can be found in the Official

Code of Georgia Annotated. The local laws apply to a

limited area like a county, and differ from county to

county; they are harder to find, as they are published in

annual compilations of Georgia Laws. (They are also good

hiding spots for county officials' salary increases.)

That might explain people's unfamiliarity with local

laws.

A 1985 local law applicable

to Fayette County (found at 1985 Ga. Laws p. 3992)

exempts property owners who are 65 or older, or totally

disabled, from 50 percent of the school tax, or even 100

percent if the taxable income on their Georgia income tax

return is less than $15,000. For people who are 65, the

Georgia taxable income excludes (1) Social Security

benefits, (2) personal exemptions ($5,400 for a couple),

(3) the standard deduction ($5,600) or itemized

deductions, and (4) non-wage income up to $24,000, which

means an elderly couple could earn $50,000 (not even

counting Social Security) and not pay a penny in school

tax.

What is significant about

this is that (1) most seniors citizens have nothing to

fear from school bond issues, and the wealthy ones among

them need worry only half as much as the rest of us, and

(2) any school bond tax stops at age 65 for many of us,

which means that people over the age of 40 need not fear

having to pay for the whole 25 or 30-year duration of the

bonds.

If you're getting on in

years, please note that another local law, from 1996,

increased the personal exemption on the property tax for

schools from $2000 to $4000 after you reach age 62. You

need to apply for this exemption at the county Tax

Commissioner's office. Then once you reach age 65, apply

each year for either the 50 percent or the 100 percent

exemption, as may be appropriate.

If the school board can

overcome its SPLOST fixation and come to its senses, and

if we ever have a bond election for schools (instead of a

SPLOST election), our older citizens need realize a

school bond issue is unlikely to affect them personally.

The honest truth about a school SPLOST, though, is that

it essentially takes away from our older citizens a good

part of the school tax exemption given them under our

1985 local law.

If the school board never

realized that fact, it was grossly negligent. If it knew

all along, and kept silent, I can only say, "Shame,

shame, shame!"

I thought you'd appreciate

this bit of tax education. Education never hurts.

Claude Y. Paquin

Fayette County

[email protected]

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