Eased Rules for Property Tax Refunds Attract More Takers

For several years, volunteer Jules Gutterman stopped in the East Valley Multipurpose Senior Center every couple of weeks to see if any senior citizens needed help filling out a property tax refund form.

This year, appointments at the North Hollywood center filled his date book twice a week.

The difference was a little-noticed change in state law that nearly tripled the maximum household income level to qualify for the refund to $33,132--to account for inflation of the last decade.

“Oh, my Lord, we were booked solid,” said Gutterman, a 77-year-old retired salesman.

Statewide, more than 340,000 people have received refunds so far this year that generally average $129 for homeowners and $205 for renters--enough, Gutterman said, to “make the difference between two and three meals a day” for seniors on fixed incomes.

The refund program began in 1968 for senior citizens as well as disabled homeowners of all ages. It was extended to senior and disabled renters nine years later. Refund amounts vary according to the applicants’ income and the tax on their home or rent on their apartment.

For nearly a decade, the income cap had been set at $13,200, a fact that state Sen. Jim Brulte (R-Rancho Cucamonga) described as “unacceptable” in introducing legislation last year to tie it to the consumer price index from now on.

“This program is in dire need of upgrading,” he said.

The cap had a deterrent effect as well. Participation in the program fell rapidly from its peak in the 1970s, as fewer and fewer homeowners qualified.

From a high of 326,000 homeowners who had 40% of their tax bill refunded in 1977, just 18,000 received refunds of less than 20% of their bill in 1996, according to the Franchise Tax Board.

Brulte’s proposed changes were folded into another tax law, signed by former Gov. Pete Wilson in 1998. But as the Aug. 31, 1999, application deadline for refunds approached, only a quarter of the estimated 1 million eligible applicants had applied.

Gutterman blamed that in part on changes in the form. What had previously been one page grew to 2 1/2. The state added a “lot of twists and turns,” he said. “It was very confusing to a lot of people.”

The state tax board announced it would accept late claims through June 30, 2000, and legislators kicked into gear, recognizing that senior citizens are the most loyal segment of their voting public.

In all, 21 Democrats and 11 Republicans sent mail to senior citizen constituents informing them of the income change, Brulte’s office reported.

“You had every member of the Legislature aware of it and sending hundreds of thousands of pieces of mail to every senior citizen in their districts,” said Brulte, whose own mailing began, “Dear Friend.”

Since then, response has improved, particularly among homeowner applicants, whose proportion of successful applications rose from 15% in 1998 to nearly a third of refunds issued so far this year, said tax board spokeswoman Carolina Beach.

While the legislation was still pending, the tax board estimated it would cost the state $71 million--$66 million for renters and $5 million for homeowners--up from $13 million last year.

So far, $64 million has been distributed, with $51 million going to renters and $13 million to homeowners, Beach said. The average award also increased, making the program slightly more attractive.

Totals still are expected to meet or even exceed estimates. Nearly $4.7 million was distributed during the last three weeks alone.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Senior Citizen Tax Refunds

Since 1968, California has provided property tax refunds to some low-income senior citizen homeowners and to disabled homeowners. Senior and disabled renters were added in 1977. Maximum income levels were raised this year.

Applicants must:

* Be at least 62 by Dec. 31, 1998, or blind or disabled.

* Have a maximum 1998 household income of $33,132.

* Prove U.S. citizenship or legal residency.

In addition, homeowners must have owned and lived in their own home as of Dec. 31.

Renters must have paid at least $50 in monthly rent in 1998.

The deadline has been extended to June 30, 2000.

For forms or help, call the Franchise Tax Board, (800) 338-0505 or (800) 852-5711.

Or check the Internet:

www.ftb.ca.gov/geninfo/hra/index.htm

Source: Franchise Tax Board, 1999