Seniors seek solutions to taxing times

Evelyn Ferguson has her place up for sale and she's getting mentally prepared to leave town.

Like many seniors, the 76-year-old Ferguson is on a fixed income and is having trouble making ends meet. This has her thinking that, while she's downsizing, a move down the trail into Edmonton might be the way to go because she could buy a place for less and also have cheaper property taxes to pay each month.

"I've had to really get my mind set that it'll only be about 20 minutes away from St. Albert. That's my coping situation," said Ferguson, who has lived in St. Albert for 51 years.

One idea that's gaining steam in senior circles aims to help people like Ferguson keep more money in their pockets and stay in their homes longer through deferred property taxes.

It works like this: the government sets up a program that allows qualifying seniors to put off paying their property taxes, to be paid off upon the person's death or when the home sells.

It's an idea that caught the attention of St. Albert senior Dick Tansey a few years ago. For Tansey, the benefits are obvious and there's no downside for the government.

"The government isn't giving money away; they're loaning it. It's a simple loan, that's all it is," he said.

The key to such a program is for the government to offer low interest rates that make it more appealing than private sector options that allow people to borrow against their home's equity.

"Reverse mortgages are a high interest rate and they'll kill you," Tansey said.

Tansey heads up the local chapter of Seniors United Now, an organization that has been actively advocating for a provincial property tax deferral program. So far, its attempts to get the issue on the province's radar have failed.

Last year Municipal Affairs Minister Hector Goudreau rejected the idea, stating in a letter the province already does a lot for seniors and that a property tax deferment program would require "significant and prohibitive" costs to set up and run the necessary administration.

He was also concerned costs would rise over time as the number of seniors increases.

Working the province

Despite initial setbacks, there are signs of progress on the provincial front. SUN will soon present its case for a second time to the Alberta Urban Municipalities Association and the Wildrose Alliance has added the idea to its platform.

Perhaps the biggest reason for optimism is a private member's bill to create a province-wide program. This week PC backbencher George VanderBurg, MLA for Whitecourt-Ste. Anne, got the green light to proceed with the bill, which he's trying to fast-track onto the agenda for the spring session. If that fails, it will wait until fall.

"I have a strong gut feeling that this will help some seniors stay in their homes longer," VanderBurg said. "As I saw with my parents, the longer you can have self-reliance … the happier you are and the healthier you are."

The Municipal Government Act already allows municipalities to offer deferred property taxes. While some have discussed it, VanderBurg doesn't know of any that have taken it on. The stumbling block is always the cost.

"Eventually a program like this would be self-sufficient but it would take a lot of years," he said. "Everybody agrees with the concept, it's who's going to carry it that's the issue."

Working the city

The St. Albert Taxpayers' Association thinks the city should provide property tax deferral to seniors by tapping its reserves.

"It keeps the demographics of the city well-rounded," said association president Lynda Flannery. "It keeps the seniors in St. Albert. Those are the people who built our city."

The city currently has a senior homeowners property tax assistance grant that provides $100 to low-income seniors but that program is set to run out after 2011. Last year 568 seniors took advantage of the program.

If that many seniors signed up for a deferred tax program, given an average municipal property tax burden of $2,152, it would cost the city $1.2 million a year until the program started to generate revenue, she said.

Mayor Nolan Crouse felt the idea has merit but also felt the cost was a huge hurdle.

It's impossible to predict how long it would take for the program to become self-sustaining and in the meantime the city would be on the hook, he said. Also, all the city's reserves are currently allocated so working in a new program would require taking money from somewhere else, he said. And implementing such a program would inevitably require a property tax hike to cover the added administrative cost.

"This is not something you do over lunch hour," Crouse said. "There's administrative work that's going to require us probably to hire somebody."

Such a program would likely attract far more applicants than the 568 that applied last year for the $100 grant, said Coun. Cathy Heron.

"We're going to have a huge chunk of our municipality not paying taxes and who's going to cover that? The City of St. Albert doesn't have that kind of reserves," she said. "I'm waiting to see how it goes with the province first."