After more than an hour of public comment and discussion by Kenai Peninsula Borough Assembly members Tuesday, the assembly voted down an ordinance to clarify the total amount of residential exemptions senior citizens can receive.
The ordinance, sponsored by Borough Mayor Mike Navarre and assembly members Bill Smith and Brent Johnson, would have added language to borough code to ensure senior tax exemptions do not exceed $300,000.
In 2007 voters approved a proposition to limit senior citizen residential exemption to $300,000. This past election voters increased optional residential exemption from $20,000 to $50,000 via an initiative.
Following the 2013 vote, the code states the first $50,000 of a residential property would be tax exempt, allowing seniors $350,000 total in tax exemption.
The ordinance would have revised the section to state it applies to the first $50,000 after all mandatory exemptions have been applied, capping the total senior tax exemptions at $300,000.
The borough heard from 11 members of the public about the ordinance. The majority were against the passage of the ordinance.
Soldotna resident Fred Sturman, one of the sponsors of the voting initiative to raise the residential exemption from $20,000 to $50,000, said he thought if you owned a home you got $50,000 exempt in addition to other exemptions.
“If you owned a house, you got $50,000. If you (were) 10 years old or 150 years old, you got $50,000 exemption,” he said.
George Pierce of Kasilof said the voters said yes to the $50,000 exemption and now assembly members are saying adding that to seniors’ $300,000 wasn’t the intent.
“Shame on all of you if you vote for (the ordinance),” Pierce said to the assembly.
David Athons, of Kenai, was in favor of the ordinance. He said, as a senior, he thinks $300,000 is “pretty doggone generous.”
“To shift the tax burden to young folks, first-time homeowners, I just personally see it as a fairness issue,” he said.
Assembly member Johnson echoed Athons’ concern about the fairness of putting the tax burden on younger borough residents.
“We have young people growing up in this community that have to bear the tax burden then because other people aren’t bearing it,” he said.
Assembly member Bill Smith said the borough’s $300,000 tax exemption for seniors is the “best deal” in the state. He said although it became common practice to add the $20,000 exemption on top of the $300,000 senior exemption, he didn’t think that was the intent.
Before the assembly voted on the ordinance, it discussed whether Assembly President Hal Smalley and Assembly Vice President Smith had conflicts of interest because they are senior citizens. Both said their residences are not valued at more than $300,000.
Smith ruled Smalley did not have a conflict of interest because his property would not be affected by the ordinance.
Assembly member Kelly Wolf motioned to overrule the chair’s decision. A vote upheld the ruling with assembly members Wolf and Charlie Pierce casting the only votes against his decision.
The ordinance was voted down with five assembly members against its approval. Assembly members Smith, Johnson, Smalley and Mako Haggerty voted in favor.
With ordinance failing, Navarre said the borough will look at its budget and consider the impact the exemption will have on services provided to residents.
Kaylee Osowski can be reached at firstname.lastname@example.org.