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Tue November 1, 2011
Oregon seniors vent at state for loss of old program (script)
About 120 senior citizens converged on the Hollywood Senior Center in Portland this afternoon (Monday,) to learn ways they might be able to pay thousands of dollars in taxes they hadn't expected.
As Kristian Foden-Vencil reports, recent changes to Oregon's 'Senior Property Tax Deferral Program' have hundreds of Oregonians worried about keeping a roof over their heads.
Jean Mitchell has eight children, 22 grandchildren and four great grandchildren. Today, 11-year-old Jaida (Jay-dah) drops by to give grandma a tupperware dish of fried chicken and mashed potatoes.
Jean Mitchell: "You want a cookie honey?"
Jaida Mitchell: "I think I'm okay for now. My father forgot to bring me a lunch."
Jean Mitchell: "Ahh. But he means well."
Jaida Mitchell: "Yeahhhh. Well Bye grandma."
Jean Mitchell: "Good bye."
Mitchell has spent her entire life in Portland's Irvington neighborhood and the family revolves around her home like planets around the sun.
Jean Mitchell: "I've lived in this house for 54 years. We paid $12,000 dollars."
The home is now completely paid-off and worth more than $600-thousand dollars.
It's been a great investment. But as a result, Mitchell's property taxes are high. This year the bill is more than $7,000.
Jean Mitchell: "I don't have any other assets. I don't have savings. My investments are my children. And they're paying off very nicely. But it's not in immediate cash."
To pay her taxes and stay in her house, Mitchell has taken part in the 'Senior Property Tax Deferral Program.' It's been around since the 1960s and it allows people like her to delay paying until they sell their homes. The taxes are then taken out of the proceeds of the sale.
After 20 years of deferrals, Mitchell now owes Multnomah County almost $140-thousand dollars. And that's fine with her.
But, she just learned the state has put new limits on the program and she's no longer allowed to take part. So she's going to have to find an extra $7,000 this year.
Jean Mitchell: "Well I won't be buying any plants for a while. It's tempting to go over to the nursery, but you can spend $50 easily there. I won't be doing any impulse buying at Fred Meyer, like new table clothes, and I don't need any furniture."
Mitchell and hundreds of Oregonians are in this fix largely because in 2008, the state took millions out of the program to pay for other senior services.
The program was healthy at the time, but then the housing bubble burst and the state didn't have enough to cover the property taxes that were due.
Tara Krugle of 'Elders in Action,' says the state ended up borrowing money to keep the program alive and imposing a whole new set of restrictions.
Tara Krugle: "So now, if you have more than $500-thousand dollars in assets, you're no longer eligible. If you have not lived in your house for more than five years, you're no longer eligible. If your house is worth more than the median of your area, you're no longer eligible And the biggest one we've see is that anybody with a reverse mortgage is no longer eligible for the program."
The result says Krugle, is that about a third of participants can no longer take part -- so about three thousand people.
Of those only about 200 were ineligible because they were too wealthy. One of the reasons politicians changed the program was a perception that a lot of wealthy people were taking advantage of it.
But now, says Krugle, hundreds if not thousands of people are in trouble because the state didn't explain the restrictions until recently.
Tara Krugle: "So we're just asking now for some sort of help for these people this year at least because they've been given six weeks notice, max, that they're in charge of their entire property tax bill. ..... Which has a lot of us worried that we're going to see a lot of foreclosure notices later this year for seniors."
How many people will get to that stage, remains to be seen.
Portland Democratic Senator Ginny Burdick, says there is no money to help. But she did hold out one small ray of hope.
Ginny Burdick: "Right now we're looking at something we can do for the people who were disqualified only because of their reverse mortgages. We're trying to look at something we can do to give them a glide path to get out of the program. Because it is very sudden to have to come up with that money when you didn't expect to."
A reverse mortgage is when you sell your home to a bank. It gives you a monthly sum, but it also allows you to stay in your home until you pass away or leave.
SOUND OF PIANO
Back at Jean Mitchell's house in Irvington, she keeps her grey cells firing by tickling the ivories and singing in the choir. She doesn't have a reverse mortgage so her plan is to pay her bill with one of her many credit cards.
Jean Mitchell: "I'm not that worried because with my children, they'll find a way to help me if I can't do it myself."
That may be just as well, because Mitchell admits, she's already carrying a balance of about $15,000 dollars on plastic. Kristian Foden-Vencil, OPB News.