SALEM, Ore. — When lawmakers gave more than a thousand seniors a two-year reprieve from paying their property taxes during the last legislative session, they made it clear they knew the lifeboat wasn’t big enough.There would be other seniors who would be booted from the Senior and Disabled Property Tax Deferral program.
Joan Hornbeck, 71, of Redmond, was one of them. And now, she feels like she’s drowning.
Her savings account has been depleted from $3,000 to $500 to cover the unexpected spike in property taxes. There’s not enough cushion, she said, to cover her insurance deductible if something happened to her or her 86-year-old disabled husband.
“The point is, we put our whole life into this home,” she said.
The program’s goal is to allow seniors to stay in their homes longer. When the house is sold, the taxes are paid back to the state. Hornbeck has teamed up with a group of other seniors to push state lawmakers to cast a wider net.
David Raphael, who co-founded the group, the Alliance of Vulnerable Homeowners, in the wake of the changes to the law, said to make the changes “retroactive is hurtful.”
Officials from the state Department of Revenue don’t have an accurate count of seniors who were disqualified when the law changed. About 1,600 were given the extension.
In 2010, there were 10,500 participants in the program. After the changes, that number is closer to 7,000.
“There have been so many changes so quickly, it’s been hard for us to have really good detailed information for why people are off the program,” said Derrick Gasperini, spokesman for the department.
The department is working on gathering comprehensive socioeconomic data about the participants so that the next time lawmakers make changes, they aren’t caught off guard by how many seniors are kicked out of the program. The goal of restricting the program was to save the state money.
The reprieve covers the 1,600 seniors who were disqualified only because they had reverse mortgages. After senior citizens fiercely lobbied, lawmakers granted a two-year extension to give them time to plan. But other requirements — that a person needs to be 62 and have an annual taxable income of no more than $39,500, and that a person’s net worth must not exceed $500,000 — have kicked others out.
Raphael believes there are 5,000 seniors who will be kicked out of the program after the two-year extension ends.
Hornbeck said her goal is to help those who were part of the program be grandfathered back in. Another new requirement is the person needs to have lived in his or her home at least five years and have homeowner’s insurance. Hornbeck has not lived in her home long enough to qualify.
Part of her, she said, is angry. She bought her home with the help of a low-income loan through the federal government. But she knew she couldn’t afford it without the property tax deferral.
She spoke to the Department of Revenue, she said, and was reassured that the program would help her as long as her income stayed within the requirements.
“I told them our income to the dollar,” she said. “(I was told) `You’re fine. You will never have to worry.’ That’s why we bought the house. … And it’s a loan; it’s not a gift.”
Raphael and Hornbeck believe many seniors were also disqualified because they were confused by the mailings from the Department of Revenue when asked to reapply to the program.
The alliance is working on gathering enough signatures to petition the 2013 Legislature with hopes of reinstating everyone who once qualified for the program. But this time around, Raphael isn’t sure lawmakers will be as sympathetic.
Last time, he said, lawmakers clearly didn’t want to gain the reputation of kicking the elderly out of their homes with an upcoming election.
“I think people were grateful for the two-year reprieve, but I think part of the motivation, in addition to doing the right thing, was to try and cool down the rhetoric,” he said.
