A few points from the tax exemption debate

Last week, the Kenai Peninsula Borough Assembly debated an ordinance intended to cap the total property value that could be exempted by senior citizens from borough property tax. The ordinance did not pass, but there are some points to keep in mind moving forward, as government revenue and tax burden are always items that spur lively debate.

 

At issue for the assembly were a pair of property tax exemptions. One allows the borough’s senior citizens to exempt up to $300,000 of their home’s value when it comes time to figure their property tax bill. The other exemption, approved by voters in last fall’s election, raises the amount that residents may exempt on their primary residence from $20,000 to $50,000. The intent of the failed ordinance was to cap the amount that senior citizens could exempt at $300,000.

First, for those arguing against changes in the exemptions, it’s unfair to label the elected officials who supported the measure as “anti-senior.” That type of rhetoric adds nothing to the debate. The discussion should focus on the pros and cons of the measure, and its potential impact on and consequences for borough residents. Debate the policy, not the people.

That said, elected officials need to be cautious when attempting to interpret voter intent, as some suggested that being able to take both exemptions wasn’t what borough residents wanted. On just about every issue, Peninsula voters’ motives tend to be all over the map. Indeed, some will vote the same way on an issue but have vastly different reasons for doing so. The only way to determine the intent of the voters is to ask a very specific question on the ballot.

What the borough government is left with is two separate property tax exemptions on the books. Just like credits and deductions on a federal income tax return, most people are going to claim as many as they qualify for. With no language prohibiting residents from claiming multiple exemptions — the borough has a number of other property tax exemptions in addition to the ones listed here — those exemptions must simply be taken at face value. And you can’t blame borough residents for wanting to keep as much money as they can in their own pocket.

If the borough government is having trouble balancing its budget, perhaps a review of all the exemptions on the books is in order. What’s more, if those exemptions were approved by voters, changes also should be approved by voters, just as the assembly did when it asked voters to cap the senior tax exemption in 2007.

But changing the rules for one group of taxpayers — however generous those rules may be — is bad policy.

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