19-03-2025
Opinion: Changes to SB197 fail to protect low-income seniors
On February 14th, my op-ed was published regarding SB197, the bill that Sen. Dan McCay proposed in the Legislature that within five years would've wiped out any hope for financial relief for low-income senior property owners via Utah's four-decade-old Circuit Breaker program.
Evidently, that editorial hit home. The bill was changed, but not enough to fix it. The first change was to exclusively grandfather in anyone who received relief in 2024, but that was it. No one else. A later version added folks who get approved in 2025. But again, just those particular senior Utahns could stay on.
Unfortunately, punitive qualifying factors and measures were added for that exclusive group. No new applicants allowed after this year. Anyone not 66 years old by this December 31st is out. If you happen to not qualify for whatever reason, you can't get back on.
The sponsor stated he wanted this bill to inspire seniors to move, to downsize and open up housing stock. Not sure where these seniors might move to that makes financial sense for them in this market, but once they do, they're off the program, as this bill states you need to be in the same residence you were in previously to continue.
Another thing SB197 does is to lock in the income chart from 2024 without future adjustments for inflation, as has been the policy in the past. That $40,840 figure can be easily exceeded when minimal SSA COLA raises are granted, or when a family member needs to move in to care for their elderly parents.
In January of this year, the tax commission proposed a maximum income of $42,623 for this year's Circuit Breaker and Renter Refund programs. Senator Wayne Harper's SB224, which got buried after McCay's SB197 was proposed, had proposed a $46,000 maximum income. Oddly, in SB197, renters can have a maximum household income of $46,000, but not property owners. Why the discrepancy? The $40,840 figure is too low, and being locked in will make qualifying much harder in the future. Consider that the governor's housing advisor, Steve Waldrip, proposed a $45,807 maximum in HB401 in 2022, three inflationary years ago.
Yes, so much of this doesn't make any sense, and it gets worse. The new deferral programs SB197 creates are a revamped version of the failed deferral program McCay instituted two years ago that benefited only eight households. In looking over the plans, tax auditors around the state have found many obstacles and pitfalls too numerous to detail here. Some senior Utahns who have a reverse mortgage will be disqualified from deferral, while some Utahns of any age who are not financially strapped will be able to game the system and use it to take out low-interest loans for years and years to come. It's just bad policy.
As long-time Chief Deputy Treasurer Phil Conder wrote to the Governor, 'I know of no County Tax Administrators in the State who support this bill. Not from an implementation perspective, financial perspective, nor compassionate perspective.'
Another fallacy is that SB197 is meant to stem a program growing unsustainably. Participation in homeowner's credit actually decreased this year and now the number of households participating is fewer than in 2023.
The state funding of the 2024 senior homeowner's credit amounted to only 8.6% of the entire Circuit Breaker program. For cost savings, SB197 aims at the wrong target. In 2023, another program had its benefits raised by 90%, and that has resulted in a cost increase to the counties of $22 million dollars in two years. That's where the 'growth' is.
Unfortunately, SB197 was circled until the fifth version was unveiled and hurriedly passed with three hours left in the legislative session with a short debate cut off abruptly.
Please promptly contact the governor's office at (801) 538-1000 or use one of these links to share your opposition to SB 197. We need county tax administrators to be able to share their accumulated wisdom and help craft a fair and useful deferral program Utahns can be proud of.
