Cap on tax break may be up to voters

Property tax exemption issue faces assembly

Posted: Tuesday, April 03, 2007

Some senior citizens and disabled veterans who’ve been exempted from paying any property taxes on their primary residences could soon see their free ride disappear.

Tuesday, the Kenai Peninsula Borough Assembly will consider introduction of a measure that would put a ballot proposition before the voters Oct. 2 that, if approved, would cap the borough’s current unlimited tax exemption at the first $300,000 in assessed value.

Given that a state law mandates that those property owners be exempted from paying taxes on the first $150,000 of assessed value, voter approval of the ordinance would mean owners of properties valued in excess of $300,000 would begin paying taxes on that excess.

The ordinance is tentatively scheduled to get public hearings on May 1 and May 15 if assembly members vote for introduction.

The measure is the latest in a string of attempts to cap or eliminate the borough’s unlimited tax exemption. The assembly has considered and rejected several such ordinances over the past dozen years. Those have often led to ill will and contention, said assembly member Gary Superman, of Nikiski, in a memo to his assembly colleagues.

“Be that as it may,” he said, “it should be obvious we need to come to some type of conclusive action. At our assembly meeting of Feb. 20, 2007, when the latest attempt by the current administration stalled, several members intimated support of a public vote on the issue. I suggest we do that and let the public decide the future course of this program. I urge your support and welcome debate to craft a final question to be put on the ballot this fall.”

While adoption of the ordinance and institution of the exemption cap would affect a relatively few property owners, the ordinance does include a hardship provision that would allow qualifying property owners to avoid property taxes they might otherwise be required to pay on assessments above $300,000. To qualify, a property owner’s taxes would have to exceed 2 percent of the gross household income.

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