News

Tax rebate for low-income seniors?

By ERICA JAHN

Staff writer

Seniors struggling on fixed incomes amid ever-rising taxes will get some utility tax relief from the city if an ordinance passes at the Federal Way City Council meeting Jan. 7.

City finance director Iwen Wang said the rebate could give eligible, low-income seniors about $90 for a yearŽ’s worth of utility taxes. She said people pay an average of $1,500 a year in utility taxes.

Seniors interested in participating in the program must:

Ž¥ Live in the city.

Ž¥ Be 65 years old or older.

Ž¥ Meet the federal definition of low-income and be the person responsible for paying the utility bills ŽÑŽÊmeaning the service is in the individualŽ’s name and that person pays the bill out of his or her own resources.

Council members began considering the rebate during the budget process this year when they decided to increase the utility tax rate to the state-allowed 6 percent maximum.

Ž“WeŽ’re always looking for ways to make it easier on our senior citizens,Ž” Deputy Mayor Dean McColgan said. Ž“They live within their means and theyŽ’re not making a lot of money. We wanted to give them an opportunity to ease that burden by offering a tax rebate program.Ž”

McColgan became interested in the idea after attending a meeting in which he overheard officials from other cities talking about their senior tax rebate programs.

Ž“I thought maybe it was a good thing to look into,Ž” he said. Ž“ItŽ’s a program thatŽ’s fairly easy to implement.Ž”

Under the program, eligible participants would pay their utility bills normally, but they would have to save their utility statements.

Utilities for which Federal Way residents pay taxes include electric power, natural gas, cable television, cellular phones, regular telephones and stormwater.

On April 30, participating seniors would file a rebate request with the city for the previous calendar year. They would submit their utility bill statements with the request.

City officials would go through the statements and figure out what the utility tax portion was over the course of the previous year. The city would then rebate eligible seniors for the portion of tax they paid.

The council initially had to decide whether to rebate just the 1 percent additional utility tax they were enacting this year, or whether to rebate the whole tax for low-income seniors.

The ordinance before them allows relief of the full 6 percent utility tax to eligible seniors.

Ž“There was no question in my mind that the whole 6 percent should be rebated,Ž” McColgan said. Ž“I felt they should get as much of an advantage as we could give. If weŽ’re going to ease the impact on senior citizens, we should ease it as much as we can.Ž”

Staff writer Erica Jahn can be reached at 925-5565 and ejahn@fedwaymirror.com

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