SACO — A proposal by the mayor for a program to allow seniors to defer property tax has gotten a less-than-enthusiastic response from the majority of the council.

Under the proposed program, a homeowner at least 70 years old can defer their property tax if their income does not exceed 300 percent of the federal poverty level and they have lived in the city for at least 10 years. The deferred property taxes would incur an interest rate of .5 percent above the otherwise applicable rate for delinquent taxes.

The proposal is made possible by a state law passed a few years ago that allows municipalities to adopt programs for seniors to defer property taxes, with the taxes collected at the end of the deferral period, with interest.

The law was co-sponsored by Mayor Don Pilon when he was a state representative, and getting this program established in Saco was one of Pilon’s campaign goals.

Pilon said he was “just astounded” that there was a lack of support for the proposal at a recent city council workshop.

He said the city does work with people who are delinquent in their taxes, but there is no formal policy.

“I’m just not comfortable with that,” he said. If there is a turnover in staff in the future, the new staff might not be aware of arrangements that had been made, he said.

As coastal property has become more desirable by out-of-staters, he said, older people along the coast have become “real estate rich, but cash poor” and are being taxed out of their homes.

Pilon noted the circuit breaker program, a state property and rent refund program, is no longer in existence. The city has a program that allows seniors to work off $750 of their annual property taxes through volunteer work to the city, but Pilon said this program is not for all seniors, recalling a conversation he had with a woman in her late 80s who was arthritic and unable to put in the mandated volunteer work.

“It’s another tool in the toolbox,” said Pilon.

Councilor Eric Cote said he thinks the proposed program is unnecessary. He said the city, for many years, has worked with people who have trouble paying their property taxes, and the current practices have less restrictions than what is being proposed.

“We’re not going to throw them out on the street,” said Cote.

City Finance Director Cheryl Fournier said the city consistently has about 40 people on some sort of payment plan for back taxes.

Fournier said the city tries anything it can to keep people in their homes.

“I don’t want to push somebody out,” said Fournier.

Fournier said she will work with people to determine how much they can pay per month, and enter a written agreement. For example, she said she may ask someone to pay more toward their tax debt after they pay off a car loan.

Fournier said people who are past due in taxes range in age, and the most common reason for falling behind on taxes is divorce.

Councilor Nathan Johnston said in an email that there is currently no need for the program that Pilon has proposed.

“The idea that seniors are being taxed out of their homes is not accurate,” he said.

Johnston said the city has not taken away any homes from seniors due to non-payment of taxes, and the city currently has systems in place to help people with difficulty paying property tax, regardless of age.

Johnston said the proposed program places a priority on senior taxpayers, and it’s not fair to the younger people who would be making up the lost tax revenue.

“There are many young people who are at or below the 300 percent poverty level mark of about $35,000 set by this program who have crippling college debt, a mortgage, a family to care for, high costs of living and high premiums on health insurance ”“ no Medicare for them ”“ yet if they want to live in Saco they have to pay the taxes,” he said.

The Town of Wells established a similar program in January 2012. According to Wells treasurer Jodie Sanborn, the town has had only one person apply for the program. The person was denied because Wells was not their primary residence, and thus they did not meet the requirements, said Sanborn.

Councilor Kevin Roche said there is interest in the proposed program by elderly citizens in the Saco community, and said the proposal is worth further discussion to see if the council could come to some sort of middle ground.

The proposal will come back to a council at a later date.

— Staff Writer Liz Gotthelf can be contacted at 282-1535, ext. 325 or egotthelf@journaltribune.com.