Tax suspensions help impoverished Iowans
By Bret Hayworth Journal staff writer | Posted: Sunday, April 20, 2008
SIOUX CITY -- After she stopped getting a veterans benefit check for her deceased husband, Linda Carlson's struggle to meet her financial obligations worsened.
Her husband died in November 2006, and Carlson lives in a modest two-bedroom Sioux City house with her 31-year-old son. They are attempting to get by on Social Security disability checks of $588 (hers) and $609 (his).
"We're on a fixed income," Carlson said. "I was having really hard problems. ... On $588 a month, I can't hardly make it. My energy bill is more than that right now."
Carlson got some economic relief in March when she learned about and was approved for a little-used program. In Woodbury and other Iowa counties, some of the most impoverished homeowners are allowed to skip their county property tax payments.
The taxes don't go away and aren't forgiven -- they're suspended but continue to accrue, albeit without interest. When the property is sold, frequently after the owner dies, the buyer must pay the back taxes.
Not all who get their taxes suspended go to Woodbury County Treasurer Bob Knowler, but those he sees at the courthouse frequently arrive at one of the semi-annual tax payment times. They're greatly distressed, he said.
"They come in and sit down and cry and think they are going to lose the house. ... They're pretty low-income. By the time they pay their (medical) prescriptions, food and utilities, it is a little tough for them," Knowler said.
When he brings up the option of tax suspension, many don't know about it, Knowler said, and he enjoys filling them in.
Most are elderly, some are disabled, all are definitively low-income, Knowler said. To be eligible for a property tax suspension, explained Iowa Department of Human Services spokesman Roger Munns, a homeowner must receive federal or state Supplemental Security Income or live in a facility where Human Services is paying some or all of the cost.
Since 1995, the human services department has sent a notice to those eligible in a mass mailing, with the missive explaining "you may not have to pay property taxes at this time. Take this notice to your county board of supervisors to discuss having your property taxes delayed."
Dianne McCall, tax deputy in the Woodbury County Treasurer's Office, reported that 80 property owners currently have tax suspensions totaling slightly more than $184,000. The lowest amount accrued on a property is $78; the highest $22,613.
"Some of them do pay a little bit on it," McCall said.
One of those who elects to pay as she can is an elderly woman who has the longest ongoing county tax suspension, a Sioux Cityan who lives on SSI payments and first had her property taxes suspended 40 years ago and whose suspended taxes are $3,355. "She does pay periodically," McCall said.
During the three years that she's served as board administrator, Karen James said the Woodbury County Board of Supervisors has denied only two out of 56 tax suspension requests. James said there isn't a hard-and-fast rule on income levels for granting suspensions.
"It's at the board's discretion. They really don't have a guideline for income," she said.
James said a request was denied in April 2006 because the applicant wanted tax relief for commercial buildings, which is never granted. In September 2007, an application was denied because the homeowner's $3,000 monthly income was deemed too high, she said.
When the requests do come before the board at the meeting, they're conducted quickly and with a degree of secrecy. The applicants fill out a form with information about their income, assets and outstanding bills, which the board sees but isn't in the packet the public gets at the meetings.
As is typical, a March 21 memo to the supervisors contained two simple sentences: "Please consider this tax suspension for L.C. If the board approves this request, the suspension resolution requires the chairman's signature." That suspension was approved in 17 seconds on a 5-0 vote with no comment from the supervisors.
Woodbury County assistant attorney Loan Hensley said there's nothing in state code that specifies the identities of the tax suspension applicants should be kept confidential.
"My understanding is that we just do that as basically a courtesy, to try to avoid embarrassment to anybody if we can," Hensley said. But she noted that when the minutes of the meetings are published in newspaper legal ads, the recipients' full names are printed.
"If anybody were to ask for that information, it does get released," Hensley said. Linda Carlson was the L.C. approved on March 21.
Knowler said most suspensions are for a few years, but they can go up to a decade or so. In the past two years, 27 suspensions have been lifted.
Carlson is appealing the loss of her husband's veterans benefits. But if that source of income isn't restored, she can't foresee getting off the tax suspension program, "unless I die or sell my house, and I'm not planning on doing either one."
Bret Hayworth may be reached at (712) 293.4203 or brethayworth@siouxcityjournal.com
Her husband died in November 2006, and Carlson lives in a modest two-bedroom Sioux City house with her 31-year-old son. They are attempting to get by on Social Security disability checks of $588 (hers) and $609 (his).
"We're on a fixed income," Carlson said. "I was having really hard problems. ... On $588 a month, I can't hardly make it. My energy bill is more than that right now."
Carlson got some economic relief in March when she learned about and was approved for a little-used program. In Woodbury and other Iowa counties, some of the most impoverished homeowners are allowed to skip their county property tax payments.
The taxes don't go away and aren't forgiven -- they're suspended but continue to accrue, albeit without interest. When the property is sold, frequently after the owner dies, the buyer must pay the back taxes.
Not all who get their taxes suspended go to Woodbury County Treasurer Bob Knowler, but those he sees at the courthouse frequently arrive at one of the semi-annual tax payment times. They're greatly distressed, he said.
"They come in and sit down and cry and think they are going to lose the house. ... They're pretty low-income. By the time they pay their (medical) prescriptions, food and utilities, it is a little tough for them," Knowler said.
When he brings up the option of tax suspension, many don't know about it, Knowler said, and he enjoys filling them in.
Most are elderly, some are disabled, all are definitively low-income, Knowler said. To be eligible for a property tax suspension, explained Iowa Department of Human Services spokesman Roger Munns, a homeowner must receive federal or state Supplemental Security Income or live in a facility where Human Services is paying some or all of the cost.
Since 1995, the human services department has sent a notice to those eligible in a mass mailing, with the missive explaining "you may not have to pay property taxes at this time. Take this notice to your county board of supervisors to discuss having your property taxes delayed."
Dianne McCall, tax deputy in the Woodbury County Treasurer's Office, reported that 80 property owners currently have tax suspensions totaling slightly more than $184,000. The lowest amount accrued on a property is $78; the highest $22,613.
"Some of them do pay a little bit on it," McCall said.
One of those who elects to pay as she can is an elderly woman who has the longest ongoing county tax suspension, a Sioux Cityan who lives on SSI payments and first had her property taxes suspended 40 years ago and whose suspended taxes are $3,355. "She does pay periodically," McCall said.
During the three years that she's served as board administrator, Karen James said the Woodbury County Board of Supervisors has denied only two out of 56 tax suspension requests. James said there isn't a hard-and-fast rule on income levels for granting suspensions.
"It's at the board's discretion. They really don't have a guideline for income," she said.
James said a request was denied in April 2006 because the applicant wanted tax relief for commercial buildings, which is never granted. In September 2007, an application was denied because the homeowner's $3,000 monthly income was deemed too high, she said.
When the requests do come before the board at the meeting, they're conducted quickly and with a degree of secrecy. The applicants fill out a form with information about their income, assets and outstanding bills, which the board sees but isn't in the packet the public gets at the meetings.
As is typical, a March 21 memo to the supervisors contained two simple sentences: "Please consider this tax suspension for L.C. If the board approves this request, the suspension resolution requires the chairman's signature." That suspension was approved in 17 seconds on a 5-0 vote with no comment from the supervisors.
Woodbury County assistant attorney Loan Hensley said there's nothing in state code that specifies the identities of the tax suspension applicants should be kept confidential.
"My understanding is that we just do that as basically a courtesy, to try to avoid embarrassment to anybody if we can," Hensley said. But she noted that when the minutes of the meetings are published in newspaper legal ads, the recipients' full names are printed.
"If anybody were to ask for that information, it does get released," Hensley said. Linda Carlson was the L.C. approved on March 21.
Knowler said most suspensions are for a few years, but they can go up to a decade or so. In the past two years, 27 suspensions have been lifted.
Carlson is appealing the loss of her husband's veterans benefits. But if that source of income isn't restored, she can't foresee getting off the tax suspension program, "unless I die or sell my house, and I'm not planning on doing either one."
Bret Hayworth may be reached at (712) 293.4203 or brethayworth@siouxcityjournal.com
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