Assembly action means bigger tax burden on younger residents

  • Wednesday, January 15, 2014 4:41pm
  • News

An open letter to the Kenai Peninsula Borough Assembly:

At your meeting of Jan. 7, the ordinance sponsored by the mayor, Mr. Smalley and Mr. Smith was defeated by a 5 to 4 vote. By those actions, it is my view, the assembly would rather accommodate a minority instead of the majority of property taxpayers on the Kenai Peninsula. Before I proceed, I am a senior and am a beneficiary of your largess.

The ordinance would have clarified in code, what should have been done in 2007, after the public voted to limit the senior property tax exemption to $300,000. Proposition 1 of 2007 read as follows: Shall the Kenai Peninsula Borough limit to $300,000 the exemption from taxation on the assessed value of real property owned and occupied as a permanent place of abode by a resident who is 65 years of age or older or a widow or widower of such a resident who is 60 years of age or older?

YES [A Yes vote limits the senior citizen property tax exemption to $300,000 and provides an exemption in hardship cases.]

What the assembly has done, is to ensure the majority of taxpayers will pay a larger share of the burden to extend to seniors a tax break beyond what the voters approved in 2007. And let us not forget, this tax exemption exceeds by double that mandated by the state and is not available in other boroughs of the state.  

The additional tax break will impact particularly the service areas for services voted on and expected by the public — fire and emergency, roads, hospitals, etc. These service areas need to be held harmless, and I certainly hope the assembly will agree to increase their mill levy to cover the shortfalls. As a member of the Kachemak Emergency Service Area, or KESA, I know how hard the members work to manage within the funds provided. Because of the tax changes, the next year will be a challenge.

Proposition 1 of 2007 also provided for a hardship exemption for those seniors who find their taxes beyond the exemption excessive for their income. That was included to ensure that homesteaders would not find themselves taxed off their property. Unfortunately, there was no income limit included in code.

So, I hope the assembly will look at the hardship exemption for senior citizens, regarding that income limit.As it currently stands, a  senior citizen residential property owner with an income of $80,000 per year, and an assessed property value of  $550,000, less the now $350,000 senior exemption, leaves $200,000 taxable at, for instance,  10 mills, which would be $2,000 in taxes. Take 2 percent of the $80,000 equals $1,600, which is the current maximum this taxpayer would be obligated to pay under the current hardship exemption code. Therefore, this senior citizen can apply for a hardship exemption and receive another $400 tax break.

And you, the nonseniors, get to take care of the difference.

I sincerely hope the assembly will take a hard look at what they have wrought, and at least put an income limit on the hardship exemption.

Milli Martin

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