Oregon Senate backs senior tax deferral reprieve

SALEM, Ore. (AP) - The Oregon Senate voted Monday to give a temporary reprieve to nearly 1,700 people who were dropped from a property tax deferral program intended to help seniors and people with disabilities stay in their homes.

The measure would give people two more years in the program if they were dropped from it solely because they had a reverse mortgage. The program allows people with low incomes to defer their property taxes, which are paid back with interest when they die or the home is sold.

"This is not as big a lifeboat as we would like to see, but it is a lifeboat. And it's a very, very important one for a very vulnerable portion of our population," said Rep. Ginny Burdick, D-Portland.

Proponents hope the additional two years would give struggling seniors enough time to arrange their finances and prepare for the cost of their property tax payments once they are dropped from the program.

The Senate's unanimous vote sends the measure back to the House, which has already approved it but must sign off on changes made in the Senate.

Oregon's property tax deferral program was self-sufficient for decades but was battered by the downturn in the housing market, which reduced the payments coming in and increased the number of distressed seniors applying.

In late 2010, the state was forced to delay payments to counties, and officials projected a $25 million dollar deficit by the end of 2012.

Lawmakers voted last year to tighten the eligibility requirements because the program was becoming insolvent. About half of the 10,400 participants were dropped.

Thousands of people dropped from the program for reasons other than reverse mortgages — because they hadn't lived in their homes for at least five years, their home was worth too much money or they had too many assets — would not be re-enrolled.

Lawmakers have heard heart-wrenching pleas from constituents unexpectedly dropped from the program and given just a few months' notice to come up with large property-tax payments. Sen. Chris Telfer, R-Bend, said the Legislature should urge social service agencies to help people struggling with the change who won't be given a two-year reprieve.

"Some of these people have a huge hardship in trying to finance the taxes that they need to pay on these houses," Telfer said.

Copyright 2012 The Associated Press.