Juneau cuts senior sales tax exemption

To the dismay of many, the City and Borough of Juneau (CBJ) Assembly voted at its Sept. 20 meeting to severely curtail the city’s senior citizens sales tax exemption. The vote was 7 to 2.

The sales tax exemption will no longer apply to purchases other than essentials – food, electricity, heating fuel and CBJ water and sewer utilities. For everything else, all citizens regardless of age or income are required to pay the 5 percent sales tax upon purchase.

Citizens below the poverty line must pay the tax throughout the year and prove they are low income to receive a rebate of up to $250 at the end of the year.

According to municipality figures, most households will lose $400 to $600 per person annually once the exemption is cut. The senior sales tax exemption was first implemented in 1980,

“It’s like getting a tax increase without the exemption,” said Ron Somerville, local advocate for senior rights in Juneau. He said the CBJ proposed cutting the tax exemption program in order to fix a fiscal gap on the backs of seniors.

The Assembly had already imposed new limits on the senior sales tax exemption in July, when it passed an ordinance restricting eligibility to only city and borough residents and issued new exemption cards for use only to resident seniors and their spouses. Previously, any senior age 65 or older with a tax exemption card could come to Juneau and purchase items without paying the 5 percent sales tax.

“People would come to Juneau for a week just to buy big items like furniture,” said Carol Comolli, site manager at Juneau Senior Center. New cards were issued to citizens of Juneau in July, and all old cards were then considered invalid.

At least 40 seniors showed up to testify against the latest proposal at the Sept. 20 meeting, while a handful spoke on why they agreed with the ordinance changes.

“All of the people that testified against the ordinance had many good reasons for disagreeing with the new changes,” said MaryAnn VandeCastle, chair of the Juneau Commission on Aging, who attended the hearing to testify on her own behalf.

The assembly members are “not the bad guys,” she said. “The assembly put a lot of time and energy into coming up with this new ordinance, but they failed to include seniors at the beginning of the project. It was just a flawed process.”

Prior to the Sept. 20 vote, exemption advocates warned of possible repercussions, such as seniors curtailing their community service work. For example, 90 percent of Juneau’s Golden North Salmon Derby is aided by seniors, and seniors are primary donors to various art initiatives throughout the city.

“Local businesses will suffer if people are looking outside of Juneau for cheaper products,” Somerville said. Seniors will look for cheaper ways to buy common items via the internet on sites like Amazon, and some will even go as far as Seattle to get cheaper prices, he said.

“Seniors look forward to turning 65 and receiving their exemption card,” said resident Tom Boutin. “It’s a tradition. Many people retired in Juneau specifically because of this exemption. They set up their homes and families wanting to retire here. They feel entitled to the exemption. To have it taken away is discouraging.”

“People feel disappointed,” Somerville said, “but they were prepared for this outcome. Now it’s just about where to go from here.”

Somerville said he planned to continue meeting with his group of seniors to talk further on the matter within the next week or so.

“There will probably be more to this,” VandeCastle said. “Hopefully this isn’t a closed case.”