May 3, 2007

Follow-Up Letter to the General Assembly

Except for the current NC Homestead Act, the NC General Assembly has NOT been friendly to seniors. The NC General Assembly has passed legislation to help seniors into nursing care facilities mostly by attaching their homes and other monetary assets. We all know that wipes out most of them if the senior remains in the nursing care facility more than three years. Tax deferments cannot help because that also attaches their homes in a very short time. Seniors deserve better than that.

Since 1972, the homestead exclusion has been amended nine times in an attempt to keep the exclusion amount in line with inflation. The last exclusion was done in 2001. Prior to 2001, the relief was a flat amount of $20,000. At that time revaluations happened and the exclusion amount could not be adjusted because it was a flat rate. Later legislation made provisions for adjusting the income eligibility every year according to the cost-of-living (COLAS) by percentages.

The COLAS started adjusting income eligibility in:

·“2003 adjusted by 3 percent, a $500.00 increase
·“2004 adjusted by 1.4 percent, a $300.00 increase
·“2005 adjusted by 2 percent, a $400.00 increase
·“2006 adjusted 2.6 percent, a $500.00 increase
·“2007 adjusted by 4.06 percent, a $500.00 increase bringing the income eligibility to the current cap of $20,500.   

The Study Commission on Aging and the Property Tax Study Commission recommended that changes be offered. The Commissions found that the value of the homestead exclusion is eroded by economic changes and revaluations. Recipients were experiencing an upward shift in the value of their property, thus resulting in a tax increase without having the exclusion value reflect those increases. It is now 2007 and prices increases have changed dramatically. The COLAS cannot keep up and some adjustments need to be made in the eligibility amount.

We must increase the cap on the current law to $35,000 or $40,000 so this law can keep up with the economy. Let’s make North Carolina friendly to seniors who reside here and to those who are coming here.

Thank you.

Sincerely,
Shirley Wiggins,

Special Legislative Action Committee Chair,
North Carolina Senior Democrats
North Carolina Senior Democrats Homestead Act