The large increase in property valuations in the last two years has caused some consternation due to the subsequent increase in taxes.

A recent article expressed concern that senior citizens fear losing their homes due to unpaid taxes, or could be compelled to sell their home due to a rising tax burden. This ignores the facts.

Fortunately, the Kenai Peninsula Borough is already protecting vulnerable populations. In addition to the borough senior citizen exemption of the first $300,000 of home valuation, there is also a hardship exemption (KPB Code 5.12.105.J) in case the remaining valuation would cause a tax to exceed 2% of the senior homeowners gross household income. With a property tax limit of 2% of income, it is very unlikely that seniors will be forced from their homes by property taxes. Also a disabled veteran is exempt from taxation.

The borough generously does not include other assets that seniors may have when evaluating senior hardship status. For example, a senior may have considerable assets in stocks, bonds or even cash in the bank. Our seniors are well cared for when it comes to borough property taxes.

I share common concerns regarding the property tax burden for the non-senior population who pay for the services all receive. To establish property value, the borough is required by the state to assess property at full and true value under prevailing market conditions. Since our entire borough sales tax is dedicated to our schools, the remainder of borough services must be funded by property taxes added to whatever we receive from the state and federal governments. Real estate sales are exempt from sales tax. As a second-class borough, the KPB property tax is mainly established by the voters creating service areas like those to maintain roads, hospitals and emergency services.

There is currently a proposal to enact a California-style assessment value freeze based on keeping the purchase price as the permanent assessed value, along with a fixed or limited rate of tax. Given that property values tend to rise over time, this is an attempt to enact an unfair burden on those who purchase, say 10 years later than a neighbor, and because their purchase would reflect current market values they would have to pay more for the same government service.

Should you pay more than your neighbor for plowing your street just because they purchased 10 years before you? This proposal would have later purchasers pick up the slack for any increased cost of operation, and amounts to a double burden because the later purchaser will not only pay for current cost of service but will need to make up for early purchasers who pay less than the current cost of service.

Much is made of the idea that predictability for financial planning requires a fixed tax amount akin to a fixed rate mortgage. Unfortunately, taxes pay for services which have variable costs, including accounting for inflation. We do not expect our utility providers to provide service forever at the same price, nor can government function on that basis.

There is a concept that property tax based on current assessed value amounts to taxing unrealized gains. However, at base we have an essentially fair system where all non-exempt taxpayers bear an equal burden with no special early bird discounts.

The property tax mill rate is established annually by our elected officials. This is where we can make a difference. An increase in property valuation does not necessarily increase the tax bill. The mill rate may be adjusted lower to offset an increase in valuations that can drive taxes at a higher rate than inflation.

Our local tax system is not perfect, but it does represent an attempt to fairly balance community interests. Let’s not follow California down the rabbit hole.

So talk to service area boards, the borough mayor and assembly members. A starting point would be asking for no increase of property tax burden beyond accounting for operating cost inflation. Sometimes when bond issues are paid off, it can represent an opportunity to reduce tax rates.

When it comes to tax rates, a bit of fiscal restraint would be welcome.

Bill Smith is a 50-year Homer area resident, a retired small business owner, a beneficiary of the borough senior property tax exemption and a former borough assembly member.