The Kenai Peninsula Borough Assembly might make it more expensive for senior citizens and disabled veterans to call the Kenai home for only six or so months of the year.
Currently, those 65 and over and disabled vets have a sweet deal living on the Kenai. The state requires that the first $150,000 in assessed value of a senior’s or disabled vet’s primary residence be exempted from property taxes. The borough goes beyond that, exempting all property taxes for these residents.
The problem is, the definition of the term “resident” has loosened over the years.
The borough’s unlimited property tax exemption was enacted as a sign of respect and gratitude to its homesteaders, and to prevent the area’s elderly residents from being run out of their homes by taxes. Honorable intentions, to be sure.
What’s not so honorable is how some wealthy, part-time “residents” are using the borough’s generosity to their advantage by spending half their time here and half Outside, yet still claim the property tax exemption on their peninsula abode.
The exemption is meant for residents year-round, raffle ticket-buying, school function-attending, here-for-the-snow-as-well-as-the-fish residents not people who only see our borough as fit for attendance a few months out of the year.
To ensure that those benefiting from the exemptions are those for which the tax breaks were intended, the borough assembly is considering tightening eligibility requirements. Here’s the proposal:
n The borough will require recipients of the state-mandated exemption (up to $150,000 in assessed value on the recipient's primary home) to be eligible for the Alaska Permanent Fund dividend for the year they claim the tax exemption or the year prior to it, as a way to prove they are permanent residents. The state allows for such a residency requirement to be enacted, the borough just hasn’t chosen to do so until now.
n There would be even greater restrictions on who is eligible for the unlimited property tax exemption. Any senior or disabled vet getting the unlimited exemption must qualify for the state’s property tax exemption (including qualifying for a dividend), and they must live in the borough for at least two years prior to the year they seek the unlimited exemption. Beyond that, the recipient can’t be gone from the borough for more than 90 days a year, except for certain reasons like receiving medical care, pursuing an education in a full-time program, serving in the military and caring for a family member.
The peninsula’s seniors are understandably nervous when it comes to taxes and government financial assistance. In 2003 they lost their longevity bonuses, as did seniors throughout the state. Attempts to cap the borough’s unlimited property tax exemption have generated similar public outcry.
Our hope is that constituents don’t lump this measure in with other perceived attempts to “take seniors’ money.” It’s not.
If passed, the measure won’t have any impact on the peninsula’s resident seniors and disabled vets. The only ones it will affect will be those masquerading as residents, who shouldn’t be getting the exemption in the first place.
Think of it like increased fines for speeding tickets it’s only a problem for those who shouldn’t be doing it.
That’s not to say snowbirds are unsavory people or should be unwelcome in our communities. There’s nothing wrong with wanting to escape the peninsula’s winters, be closer to family Outside, or many of the other reasons why people split their time here and abroad.
But there is something wrong with expecting peninsula residents who do make a permanent commitment to their community to shoulder an extra tax burden for those who treat the area as a vacation spot, rather than a year-round home.
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