Property tax assistance for low income seniors, the blind and the disabled is available again. In 2009, the Legislature ended the Property Tax Postponement (PTP) program that for 40 years had allowed low income seniors, the blind and the disabled to defer payment of their property taxes.
That the PTP program is back is good news, but the question begs to be asked, why was a program that for vulnerable homeowners could mean the difference between remaining in the homes where they had resided for decades or being forced out into the street, canceled in the first place?
The answer is a sad commentary on how Sacramento works when political insiders think no one is looking.
First, it is important to recognize the unofficial motto of the State Legislature, which is “When you’ve got it you spend it.” This is what then Senate leader David Roberti said in response to Gov. George Deukmejian’s effort to return excess tax revenue to taxpayers in 1987. Unsaid, of course, is that lawmakers are equally willing to spend even when they don’t “got it.” This helps explain why, even before the economic meltdown in 2008, the state budget was running a deficit of billions of dollars.
When the recession came, and state revenues declined, the Legislature’s response was to raise taxes on Californians whose economic fortunes had also plummeted. Lawmakers raised sales taxes and income taxes. They even went after parents by cutting the tax deduction for dependent children in half.
While taxpayers got a haircut, the highest paid state workers in the nation were fully protected. Bureaucrats who had been given furlough days to cut costs, were fully reimbursed for lost pay.
The Sacramento politicians made a few cuts to limit the increase in state spending, but spending, nevertheless, continued to expand. The motivation for cutting at least one program, was clearly mean spirited. To save a few million dollars in the current budget, legislators eliminated the Property Tax Postponement program. However, this program, so important to low income seniors, was never a handout or an entitlement. The state recovered all costs, plus interest, when the home was sold or the owner passed away.
Taxpayer advocates immediately set about lobbying for the return of the PTP program, a program that pays for itself. Finally, even thick skinned lawmakers were embarrassed and approved reinstatement of the PTP in 2014. However, claiming that time was needed to train staff and prepare paperwork, the benefit was not to be available for another two years.
Time is up and the Office of the Controller will begin taking applications in October. To be eligible for property tax postponement, a homeowner must be 62, or blind, or have a disability. The homeowner must also have a household income of $35,500 or less, have at least 40 percent equity in the property, and occupy the home as the primary residence, among other requirements.
The interest rate for taxes postponed under PTP is seven percent per year. Postponed taxes and interest become due and payable under PTP when the homeowner moves or sells the property, transfers title, defaults on a senior lien, refinances, obtains a reverse mortgage, or passes away.
Funding for the program is limited and is available on a first-come, first-served basis. The program application and details are on Controller Yee’s website or by phone at (800) 952-5661.
However, taxpayers who need this assistance must remain vigilant. If lawmakers think no one will notice, they may throw the PTP overboard again, as they did in 2009.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.