The Delaware House of Representatives is currently considering a bill that would nearly double the tax break for senior citizens.
House Bill 287, introduced by Rep. Kevin Hensley, R-Odessa, would increase the Senior School Property Tax Credit to $750 per year, according to Town square delware.
For homeowners 65 and older, a 50 percent credit can be claimed against regular school property taxes up to $400.
A homeowner can only claim the credit against property taxes on their primary residence.
The maximum credit amount was $500 until 2017.
Legislators later reduced the credit by 20 percent following a large budget deficit.
Each budget since then has included that reduction, despite a robust recovery in state revenues.
“State revenue is way up, and this does not include the massive amount of relief funds we’ve received from the federal government,” Hensley explained.
“We’ve also, smartly, set aside money in rainy day and reserve accounts to take appropriate precautions for the future. Now I believe the state has an obligation to share its good fortune with its citizens.”
There are no Democratic co-sponsors of the bill.
The House Democratic Caucus were unavailable for comment when reached right away.
Tax cuts are part of a growing package of Republican proposals.
According to the nonpartisan Delaware Economic and Financial Advisory Council, or DEFAC, the state is on track to collect around $820 million more than previously predicted.
Responding, Republicans filed legislation to eliminate Delaware’s income tax, gross receipts tax, and corporate tax; to decrease the real estate transfer tax; to adjust taxes to reflect rising cost-of-living costs; and to provide tax credits for Delaware’s lowest-income earners.
“By virtue of their life-long contributions, no group of citizens has collectively paid more taxes than our seniors,” Hensley noted.
“At a time when the state is flush with cash, there is no excuse for not providing some modest tax relief to our older population, many of whom are now living on fixed incomes.”
Rick Geisenberger, the state’s secretary of finances, said lawmakers will need to find a way to fund those costs if they decide to raise the maximum credit to $750.
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“At the end of the day, it’s not a tax cut,” Geisenberger said. “What it is, is it’s a budget expenditure because the way it works is the school districts still get the money — it just comes out in state coffers, rather than out of the taxpayer coffers.”
“Eventually, it gets paid for,” he continued. “It’s going to have to be paid for through income taxes, through realty property taxes or through some other form of taxation because the expenditure doesn’t go away.”
Rep. Mike Ramone, R-Pike Creek South, also introduced a separate bill that would restore the senior tax credit to $500 as it was before 2017.
Last year, a fiscal note revealed that the bill could return to Delaware seniors more than $4.2 million a year.
Geisenberger noted that the $4.2 million estimate would need to be revised in his remarks.
There has been broad bipartisan support for House Bill 108. Currently, there are ten Republicans and five Democrats on the list of sponsors and co-sponsors.
Hensley’s bill has not yet been analyzed to determine how much money taxpayers will retain.
Upon being asked whether either bill should be passed by the General Assembly, Geisenberger replied, “if it’s something we supported, we would have put it in our budget.”
The House Administration Committee is scheduled to vote on both measures.
