It’s a fall phenomenon as dependable as Thanksgiving turkey: Cities and towns set their tax rates for the following year. And, in the midst of a robust economy with rising property values, that usually brings an increase for homeowners, with a heightened effect on those living on modest, fixed incomes.
The stakes of those local taxing decisions were underscored by a recent study published by the Gerontology Institute at the University of Massachusetts Boston. It updated the “elder index,” or estimated budget of seniors living no-frills lifestyles — paying for food, health care and basic household goods.
The study found 3 of 5 seniors living alone in Massachusetts don’t have enough monthly income to cover that basic budget. That’s the highest rate of any state in the country, according to the report titled, “Living Below the Line: Economic Insecurity and Older Americans.”
Seniors living alone in New Hampshire fare a little better. Slightly more than half don’t have enough money to cover the basic budget estimated by researchers. That puts the Granite State at 10th in the country for economic insecurity among single seniors.
The report was not about property taxes but economic insecurity more generally. Still, people struggling to pay for the basics — prescriptions, phone bills and breakfast — feel an especially sharp pain when the property tax bill arrives.
Another troubling finding of the Gerontology Institute study is the large number of seniors — about one-third living alone in the U.S. — with incomes that aren’t enough to cover basic budgets but are above the federal poverty line. Even though they struggle, they’re out of consideration for many state and federal assistance programs. Nearly 44% of single seniors in Massachusetts occupy this “gap,” according to researchers. In New Hampshire it’s about 40%.
Seniors living together are also stretched thin, although the problem is not as exaggerated. About 30% in Massachusetts do not have enough income to meet the basic “elder index,” still the third-worst rate of economic insecurity in the country. In New Hampshire, the economic insecurity rate for senior couples is about 24%.
The report doesn’t delve deeply into the whys of this situation other than to point to a cost of living in this region that is hard for anyone but “poses a significant challenge to livability among older residents.” A special outtake about the problems faced by Massachusetts notes the strain is heightened in greater Boston.
A no-frills budget, but the way, amounts to about $26,220 for seniors who own their homes free and clear and live by themselves. It’s $38,424 annually for a couple.
The report notes that policymakers in Massachusetts have plans to help older residents who struggle to make ends meet. But it also urges officials to “evaluate the extent to which policies contribute to the economic security of older adults.”
On the local level, anyway, this happens every time cities and towns set property tax rates.
Programs in Massachusetts and New Hampshire exist to reduce, or defer, the tax burden for seniors who own their homes. And in Massachusetts, at least, lawmakers are considering a variety of ways to expand those deferrals and exemptions.
At a hearing on Beacon Hill in September, lawmakers agreed the system needs reform, the Worcester Telegram & Gazette reported. For example, while most communities in the state allow seniors to put off tax payments until they sell their homes or for their estates to settle once they die, many seniors either aren’t eligible or aren’t comfortable with the interest rates.
The Gerontology Institute’s study may not tell us something we didn’t already know about the high cost of living and its burden on older residents. But it certainly should inject some urgency into discussions not only of property tax relief but assistance more broadly. And it should be on the minds of state officials and local leaders making decisions to increase the tax burden on people who simply cannot afford it.