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Targeted tax relief for the unemployed

I noticed that Waynesboro City Council has added to its agenda for its staff briefing tonight an item to discuss tax relief for the elderly and disabled. I’ve been talking up behind the scenes an idea springing from that senior-focused tax-relief effort that I think could gain some traction given the economic times. And the idea, local property-tax relief for the unemployed, seems to be meeting with support from the people I’ve broached the topic with to date.

The notion in a nutshell is to get the General Assembly and the governor to agree on enabling legislation that would give localities the option to offer qualifying individual taxpaying homeowners who have been unemployed at any point in a given calendar year tax relief in part or in whole depending on how a particular locality would decide to administer its own tax breaks.

This is essentially what is done under the heading tax relief for the elderly and disabled. Waynesboro among many localities in the Commonwealth offers tax breaks to seniors and the disabled who meet certain prespecified income-eligibility requirements.

What I like about the program is that it targets tax relief directly to people who are struggling the most to make ends meet.

Targeting tax relief to people who have been victims of the declining job market makes sense in this line as well.

The main drawback is the same that we face with the current senior and disabled tax-relief program, namely that every dollar of tax relief is a dollar that doesn’t go to the local revenue coffers, which means the relief program has the same effect as spending money on the budget bottom line.

An across-the-board tax cut, of course, has the same effect, and is usually much more pronounced.

I ran this by a friend in the city administration a week or so ago and received some positive feedback to the idea. I’ve also used a couple of business cohorts here in the Valley as sounding boards and have a feeling that I might be onto something after hearing their thoughts on what I’ve been thinking here.

I look at this as a possible middle ground between the two factions that have developed on City Council in Waynesboro on the merits of the city tax rate being left at its current 70 cents or being dropped back to 67 cents, and think that actually the 67-cent backers get even more than they’re bargaining for right now. Their concern, and I think it has been well stated, is that people losing their jobs in the recession shouldn’t be exposed to possible tax increases at the same time. The plan I’m advocating not only takes a possible tax increase off the table, but it offers a tax break up to 100 percent of an annual city tax bill to those hit hardest by the economic downturn.

The 70-cent crowd, for its part, gets its wish of a stable tax rate and stable revenue base, obviously with some additional pressure to account for the monies that would be returned to local property owners who would meet the criteria of the relief program.

The term win-win is overused today, but I think it truly applies here.

The next step would be to get the governor to call a special session of the General Assembly to pass the legislation that localities would need to have on the books to be able to offer this program.

The precedent is there with the relief program for seniors and the disabled, so to employ another overused term that one should be a no-brainer.


– Column by Chris Graham

Augusta Health Augusta Free Press Kris McMackin CPA
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