The Kenai Peninsula Borough Assembly’s use of a residency requirement in an attempt to rein in the unlimited property tax exemption previously given to senior citizens is a step in the wrong direction.
The assembly needs to bite the bullet and cap the exemption at the state-mandated $150,000. Period. Otherwise the issue will continue to drag on, in effect, forcing nonseniors to shoulder a bigger share of the borough’s tax burden than should be required of them.
Capping the exemption is not being disrespectful to seniors. It isn’t ignoring their contribution to the quality of borough life. It isn’t designed to send them to the poorhouse or elsewhere to enjoy their retirement.
But the exemption, even with the residency requirement, penalizes other residents who live and work here. Given the borough’s changing demographics more seniors, fewer young families the unlimited exemption is just not fair.
When the assembly meets in Homer next week, it should reconsider this ill-advised, poorly considered residency requirement and defeat it. Then, it should ask the borough mayor to present a comprehensive rewrite of the property tax exemption ordinance for the assembly to consider. That rewrite should cap the exemption at $150,000 and provide relief for hardship cases. No senior should fear losing his or her property once the exemption is capped.
Capping the exemption is a realistic recognition that times have changed. When the ordinance took effect 20 years ago there were far fewer seniors living in the borough and the cost to the borough was an estimated $131,000. Just five years ago, however, 1,947 seniors claimed the exemption, amounting to $210 million. This year, 2,661 seniors claimed the exemption for a total of $400 million.
By all accounts, the senior population is growing. And why not with such a great tax break? The Kenai Peninsula Borough is the only one in the state that offers the unlimited tax exemption.
In addition to doing precious little to stop what has become an entitlement that’s out of control, there’s another reason the assembly should do everything in its power to defeat this legislation and start all over: It’s too complex. The borough and its citizens don’t need more red tape.
Not only would seniors have to be eligible for a permanent fund dividend to receive the unlimited exemption, but, with some exceptions, they could not be absent from the peninsula for more than 120 days in any one year. Does anyone really think tracking these absences is the best way for borough employees to spend their time not to mention your tax dollars?
Capping this property tax exemption is reasonable and fair. The borough no longer can afford to be unlimited in its generosity. It can make exceptions for hardship cases.
If the assembly chooses not to reconsider this residency requirement on the exemption, the borough mayor should not hesitate to veto it.
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