01:00 AM EDT on Wednesday, April 5, 2006

BY BARBARA POLICHETTI
Journal Staff Writer

EAST GREENWICH -- The Town Council last night decided to expand property tax relief for the elderly by allowing residents over the age of 65 to defer payments of tax increases.

Under the plan, which is subject to General Assembly approval, the tax bill would be frozen and exempt from ensuing years' tax increases. The uncollected increases would be collected by the town when the property changes hands. No interest would be charged on the owed money.

The council unanimously adopted the plan before 350 spectators -- mostly older residents -- who crowded the Swift Gym to urge the council to go one step further and institute a tax freeze without future payback.

Officials said they hope to introduce the benefit -- offered as an option to those 65 and older who have lived in town for at least five years -- when tax bills are mailed at the end of the summer for the fiscal 2007 fiscal year.

"This is not an easy choice to make," Councilman John McGurk said. "I am afraid of segmenting groups within the community, but I also believe that we can give our older residents some form of relief."

The deferral option will augment the town's four-stage system that gives elderly householders an increasing exemption on the assessed value of their properties. The exemption is $25,750 for a taxpayer 65 to 70 years old, for example, and $77,250 for a taxpayer over 80.

Finance Director Thomas Mattos last night stressed that those exemptions will be automatically increased now that the town has finished its full-scale revaluation and residents are receiving mailed notices of their updated assessments.

The council's decision to implement the tax-deferral program came despite an all-out push by a well-organized group of older residents for an outright tax freeze. The majority of the people who stepped to the microphone to address the council last night argued that East Greenwich needs to do more for its elderly residents.

Many drew comparisons with other communities that do have freezes, while others asserted that their generation has built more than its share of municipal buildings and schools.

The School Department was a frequent target, with speakers criticizing the teachers contract as overly generous, the cost of maintaining buildings and the school system's lion's share of their tax dollars.

A minority of speakers braved "boos" to suggest that an all-out tax freeze for the elderly would unfairly shift the tax burden to others and restrict the town's tax revenue stream in the long term.

"A tax freeze for seniors is not fair to the 'juniors' in town," said Bradford Bishop, who was a member of the ad hoc committee the town formed last year to look at the possibility of expanding tax relief for the elderly. "Someone will have to pay for this."

Bishop said that one of his concerns is that the deferral plan does not have any income requirements and does not identify those who might be most in need of some relief. "Everybody is this room wants lower taxes," he said. "But what we have to find out is who really needs it."

Joseph Augustine, who has mobilized support for a tax freeze, said he appreciated the attention the Town Council has given to the issue and that the tax deferral is a step in the right direction.

But, Augustine observed, it's "save now, but pay later."