A bill to provide property tax relief to low-income seniors, veterans and people with disabilities cleared a pivotal House committee Monday and is on its way to the Rules Committee.
The Republican-sponsored bill would expand eligibility for the Property Tax Exemption Program, which sponsors say does not account for the substantial costs that medical issues can present.
HB 1438 would allow people with an income above the various thresholds in Washington state to qualify for the exemption by deducting medical expenses from their combined disposable income.
The bill would cover a range of common expenses like insulin, prosthetics, Medicare supplemental insurance policies, cost-sharing, copays, prescribed oxygen and electronic wheelchairs. Those expenses could be calculated and applied as deductions, thus bringing the person below one of three income thresholds in each county. The income thresholds vary based on the cost of living.
Already deductible are things like hearing aids and adult nursing home costs.
Sponsor Rep. Ed Orcutt, R-Kalama, has been part of the effort to raise the income threshold for the program for years, but said he realized it would not cover some of those struggling the most — people just above the line with large medical costs.
“I said, ‘who has the real need? Who has the greater expenses coming out of their income that are related to their age or their disability?'” Orcutt said.
“It’s some of the medical costs they have, with supplemental insurance, with ongoing costs of oxygen and other items like that,” he said. “It seems like a better way to go than to continually move that income level up — to allow more deductions for those who have costs.”
Steven Drew, who administers the tax exemption program as Thurston County Assessor, said he watches people “unfairly” drop out of the tax exemption program every year because of health issues.
” … They have to draw more money out of savings or retirement that is taxable income in order to pay for medical expenses. And they fail out of the program right when they are in financial difficulty because of that real situation,” Drew said at a Feb. 11 hearing.
The bill would be the equivalent of raising the income threshold by several thousand dollars for those with medical expenses, he said, and “level the playing field.”
The Legislature raised the household income threshold with bipartisan support in 2019 to adjust for regional differences in the cost of living.
Orcutt is also spearheading two more bills, HB 1247 and 1248, aimed at allowing more property tax exemptions for seniors, veterans and disabled people leasing land in a mobile or manufactured housing community.
According to Orcutt, the bill will now head to the Rules Committee.