JUNEAU (AP) -- Local property owners could get a tax break under bills prompted by last year's failed property taxpayer revolt.
Bills filed by Sen. Gene Therriault, R-North Pole, and Rep. John Davies, D-Fairbanks, would allow local governments to increase the household property tax exemption from $10,000 to $50,000.
Under the current exemption, $10,000 is shaved off the tax assessments of homeowners living in the Fairbanks North Star Borough and in a handful of other Alaska municipalities that choose to do so.
So if a Fairbanks family lives in a house assessed at $150,000, it can pay borough taxes as though the house was worth $140,000.
That $10,000 is the most that can be exempted under current state law. Davies' bill would put the maximum exemption at $40,000 for most households, with an additional $10,000 possible for those who volunteer as firefighters or emergency personnel.
Therriault's proposal would make an across-the-board exemption cap of $50,000, allowing a $150,000 house to be taxed as if it was worth $100,000.
''It's a maximum,'' Davies said. ''And it's totally optional.''
If the bill passed, the borough wouldn't necessarily raise the exemption, said Karen Parr, presiding officer of the Fairbanks assembly.
The borough's staff is studying just how much the move would drain the coffers, she said.
''Obviously those tax dollars have to be made up somehow,'' Parr said.
Parr said a sales tax would be the most likely option for replacing the lost property tax revenue, but that would require a public vote and raise thorny issues such as what goods to exempt from the sales tax.
The borough mayor, and some assembly members, have said they want to consider alternative revenue sources in the wake of the debate over last year's failed statewide initiative to limit local property taxes to 1 percent of a home's assessed value.
Raising the household exemption would not hurt the borough's bottom line as much as simply lowering the tax rate, since the largest borough taxpayers are commercial properties.
Both lawmakers said their numbers are flexible.
Therriault said he is waiting to hear from the local governments regarding just how much they want the maximum exemption to be.
''It's a local call,'' Therriault said.
Davies, a former borough assembly member, believes it may be a good idea for the Fairbanks borough to institute a modest sales tax and increase the household property tax exemption.
''It would spread the burden a little bit,'' Davies said. ''I think it would be a little more fair.''
Peninsula Clarion ©2015. All Rights Reserved.