The Kenai Peninsula Borough Assembly on Tuesday proposed to cap the total residential property tax exemption for qualified senior citizens at $300,000.
The not-so-new cap comes on the heels of Proposition 1 on the October ballot, which increased the basic property tax exemption on the primary residence for those living in the borough for 183 days each year from $20,000 to $50,000.
Ordinance 2013-36 was sponsored by District 8 assembly member Bill Smith. He was joined in sponsorship by District 7 assembly member Brent Johnson and borough Mayor Mike Navarre.
A public hearing and vote on the matter is set for the Jan. 7 regular assembly meeting.
The new ordinance seeks to clear up language from a 2007 proposition that sought to limit senior exemptions to a maximum of $300,000 — comprised of a $150,000 state mandated senior exemption and an additional $150,000 borough senior exemption.
To qualify for those exemptions, residents must be older than 65 or 60 and the spouse of a resident that was 65 or older when they died.
Due to interpretation of the 2007 language senior residents automatically got the previous residential $20,000 exemption on top of whatever senior exemptions were available and now would get the $50,000 exemption, Borough Assessor Tom Anderson said.
Borough-wide, 3,687 properties are listed as receiving senior exemptions up to $300,000. Of those, 632 were beneficiaries of exemptions more than $300,000, Anderson said.
The total value of senior-owned exempt property above $300,000 benefiting from the vagary is $12,245,100, Anderson said.
Smith said he didn’t feel that the intent of the ordinance was to allow the additional exemption, beyond those granted a hardship exemption.
“This ordinance would clarify that all residential exemptions for seniors are capped at $300,000,” Smith said.
To support his argument, Smith pointed to the original wording of the 2007 proposition. It gave two examples of senior property valuations, one at $185,000 and one at $350,000. The lesser was completely exempt from borough property tax and the greater was exempt to $300,000.
“The senior would be taxed by the borough on the remaining $50,000 of value,” read the passed 2007 ordinance.
Soldotna resident and retiree Fred Sturman was one of the primary forces behind the 2013 Proposition 1 seeking to raise the basic exemption to $50,000. In the lead up to the election, Sturman was adamant that the sought increase was for the benefit of younger working-age residents of the borough and not the benefit of the seniors, who most often get the discounts and tax breaks in society.
Reach Greg Skinner at firstname.lastname@example.org.