$300,000 cap for senior property exemption

Language seeks to reinforce 2007 initiative

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 greg.skinner@peninsulaclarion.com.