Senior Voice -

By Mackenzie Stewart
Senior Voice 

Kenai Peninsula Borough to vote on senior property tax exemption

 


After meeting on July 26 to decide whether or not to put Ordinance 2014-24 on the Oct. 4 ballot, the Kenai Peninsula Borough Assembly voted to move forward with the ordinance’s senior property tax exemption phase out plan.

According to a borough brochure explaining the ordinance (a link to the brochure is published below), current eligible seniors are offered up to $350,000 in property tax exemptions. The Kenai Peninsula Borough is one of the few municipalities in Alaska to offer an additional $150,000 property tax exemption to seniors along with the state’s mandated $150,000 property tax exemption for seniors and disabled veterans. The ordinance plans to phase out the additional $150,000 exemption as a way to alleviate financial stress on the peninsula’s younger population in years to come.

“Right now, the Kenai Peninsula Borough is in a position where $300,000 a year is spendy, and money gets tight,” said Larry Persily, assistant to Kenai Peninsula Borough Mayor Mike Navarre. “As the senior population increases, finding a way to spread out the funds for the younger population is good.”

The Assembly received calls and emails from seniors opposing the ordinance before the July 26 meeting, but few spoke out in person during the actual assembly.

“I was surprised to see that only a few people showed up,” said Blaine Gilman, Kenai Peninsula Borough Assembly President. “We received lots of emails beforehand, where people who were fearful of it came forward, so I expected more. Once we explained the phase out plan, people were more understanding of what we were trying to do.”

According to the ordinance brochure, current Kenai Peninsula Borough seniors born on or before Dec. 31, 1952, will continue to receive their ordinary amounts of $150,000 in mandatory exemptions, $150,000 in optional exemptions and $50,000 in residential exemptions.

Starting in 2018, the phase out plan seeks to gradually cut out the optional senior property tax exemption. As outlined by a graphic in the brochure, seniors born between Jan. 1, 1953 and Dec. 31, 1955 will be eligible for the mandatory $150,000 exemption, $100,000 of the optional exemption and $50,000 in residential exemptions, leaving participants with $300,000 total exemptions rather than the current $350,000.

Seniors born between Jan. 1, 1956 and Dec. 31, 1958 will also be eligible for the mandatory $150,000 exemption, $50,000 of the additional exemption and $50,000 in residential exemptions, leaving these participants with $250,000 in total exemptions. By 2024, residents born Jan. 1, 1959 and later will still be eligible for the mandatory $150,000 exemption and $50,000 in residential exemptions, but will no longer receive any portion of the optional exemption of $150,000.

“It’s not like going off a cliff,” said Persily. “We’re easing into it. Once people understood that and that it wouldn’t impact current seniors, they were more accepting of it. Maybe they wouldn’t vote for it, but they were more accepting.”

Even with the changes, residents who turn 65 years of age after Dec. 31, 2023 and own a home assessed at less than $200,000 would pay no borough or service property taxes, and the borough’s hardship provision that limits a qualifying senior’s property tax bill to 2 percent of their annual household income would apply to eligible seniors.

“Even after we phase out the optional exemption, we’re still offering more than most of the other boroughs,” Persily said.

According to the brochure, the Kenai Peninsula Borough will still have the fourth highest senior tax exemptions in 2024 after the North Slope Borough, Skagway and the Mat-Su Borough.

“The borough was required to do this,” added Gilman. “The senior population is growing at a rate much higher than any other demographic in the area. Phasing it out from $150,000 to $100,000 to $50,000 gives people enough time to plan for their retirements. It was the fairest way to do this.”

To view and download the brochure released by the Kenai Peninsula Borough, visit http://www.kpb.us/images/KPB/MYR/SalesPropertyTax/Senior_Tax_Exemption_Brochure_Final.pdf

 
 

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