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Legislators Move to Fix Budget Error Affecting Low-income Seniors

Published Nov. 14, 2017

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Joy and relief marked the start of the month as the state finally began operating with an approved budget 123 days after the start of the fiscal year. For towns like Guilford, which received more in state revenue than assumed in the local budget, things were looking rosy. However, as residents and officials examined the massive two–year budget, it became clear that while some state aid programs went up, programs funding rent and property tax assistance for elderly and disabled residents were either cut from the budget or not properly allocated.

For Guilford, a town with a low poverty levels, the numbers are not as alarming as for some other town in the state, but officials at the Guilford Department of Social Services said seniors are still calling in a panic because payments from these programs have not shown up.

Renter’s Rebate Program Faces Language Issues

For those who rent, the state offers the renter’s rebate program: Low-income seniors and the disabled are sent a check by the state each October to help offset the costs of rent. The low-income elderly and disabled residents eligible and qualified for the rent rebate program normally receive their rent rebate checks from the State of Connecticut by Nov. 1. This year, the rent rebate program is funded in the budget, but how the money is to be distributed is unclear. For residents, that confusion has led to late checks.

According to a letter sent out from the State Office of Policy and Management (OPM) on Nov. 2, the recently approved budget has allocated money for the program, but the budget language shifts the responsibility of distributing the rebate payments from the state to the towns.

“Under this law, the shift in responsibility is not accompanied by any state funding because the General Assembly stranded $13 million a year at OPM without providing the agency the ability to distribute these funds either to individuals or to the towns that must now administer the program,” the letter states. “In short, OPM is no longer authorized to administer the program and no longer has the authority to process payments for this purpose.”

Guilford Social Services Program Director Danielle Scheltens said the office has received a lot of concerned calls from applicants to the program, but with very little information currently available, Scheltens said the staff is not able to tell residents very much at all.

“We just can’t tell them anything because we don’t know how or when or even if it will be funded,” she said. “Our office is responsible for the intake of the program and we have taken well over 100 applications and those people are now in limbo waiting and they are all seniors or disabled and they are all counting on this money to come in.”

According to a brief provided by the Office of Fiscal Analysis (OFA), the estimated fiscal year 2017 rebate for Guilford is $68,115. The brief explains while there is money allocated for the program, it may not be enough to cover 100 percent of the rebates over the next two years.

However, state legislators said the problem with the rebate program is a matter of communication. State Representative Sean Scanlon (D-98) said the money is there, but how the program will be administered needs to be cleaned up.

“My office has been receiving a lot of calls about this issue and there was a mistake made in the language of the budget where [the legislature] set aside the money for [the program], but didn’t direct it,” he said. “We need to come back and fix it and my understanding is we are going to do that next week. To seniors who have called my office about this, I tell them that the program still exists, the money is there for it, we just need to go in and do a little bit of a language fix to ensure that it gets to them.”

Scanlon said, while how towns will manage the program is not clear, the state will continue to fund the program—the towns just have to administer the money. State Representative Vincent Candelora (R-86) said the intention was never to eliminate the program, but the timing of the October payment may have been messed up due to the timing of the budget passage.

“The rent checks go out in October, so the rent checks should have gone out prior to the budget being adopted and I think there might have been a belief that some of those rental payments were released, but they weren’t because the governor’s office didn’t release them because there was no revenue and technically no budget,” he said. “We are going back to look and clarify how that program is to be administered and to restore that.”

While individuals on the program are currently short a check, both Scanlon and Candelora said the intention is to get that late check to residents.

“The check that normally goes out in October would be coming out in November instead so we are looking at this as being a delay as opposed to elimination,” said Candelora.

Circuit Breaker Program Cut

While the Renter’s Rebate Program may have an easy fix, the Property Tax Relief Elderly Circuit Breaker Program does not. The state’s Circuit Breaker Program reimburses towns the cost of providing a property tax credit to income-qualified elderly and disabled homeowners. The goal of the program is to help the elderly poor and disabled to stay in their homes. The credits are assessed for the prior year’s property tax obligation. The Town Assessor’s Office takes and reviews Circuit Breaker applications and the supporting documentation to verify each property owner’s eligibility.

In Guilford, the town has 308 people already qualified for the program this year and the value of the credits they receive totals $181,014. With this budget, the town will not receive state reimbursement for these tax credits this year.

According to the Guilford Finance Director Maryjane Malavasi, the town does budget the circuit breaker reimbursements as revenue. However, since the town is currently looking at a surplus of roughly $250,000 in state aid, Malavasi said the surplus revenue can cover the loss this year.

In the letter sent by OPM, it’s expressly clear that there is no funding in the state budget for payments to municipalities under this program. Scanlon said reductions had to be made in this budget and the Circuit Breaker Program was one of them.

“There were some very tough cuts in the budget and we had to make a lot of hard decisions and that was one of them,” he said. “My hope is that we can maybe find a way in better times to return some of these programs that we know where making an impact on peoples lives. We have just had to cut back and that is an unfortunate reality of this budget crisis.”

Medicare Savings Program

While the program has very little to do with town government, the new state budget also takes a big whack at the Medicare Savings Program (MSP). The program is a Medicaid-funded program that helps cover hospitalization, medical, and prescription drug costs. Starting Jan. 1, 2018, the state is lowering the eligibility thresholds in an effort to save close to $70 million.

The previous annual income threshold for low-income seniors and the disabled participation in the MSP was $25,447. The state budget’s new threshold for help is half that annual income or $12,060 or less per year. The new thresholds are estimated to cut help for more than 68,000 seniors and disabled individuals in the state. In fiscal year 2016, the monthly average number of Guilford residents using MSP was 334.

Since the average monthly Social Security payment in the U.S. is about $1,300 per month, the average annual Social Security income for a retiree would be $15,600. Many seniors rely entirely on the Social Security payments to live. Under this budget, those low-income seniors and disabled getting the average payment would no longer qualify for the MSP benefits.

Guilford Social Services said there is little information to share until the dust settles. The State Department of Social Services (DSS) website says DSS is in the process of compiling information for those residents who will be affected by the eligibility change.

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