During the 1980 recession, Alaska lost over 20,000 jobs, most of which were in Anchorage, where a majority of the oil, construction and related services were located. The 2015 reduction in oil prices have resulted in over a $3 billion state budget deficit. This deficit means the State of Alaska will have less money to allocate to local municipalities and less money to fund a capital budget upon which local construction companies rely, creating economic instability.

Already job losses in Anchorage for 2016 are estimated to be 2,000. Job losses for 2017 through 2019 will only increase due to the fact that oil prices will likely stay in the $40 to $50 per barrel range. Low oil prices and a state budget deficit means less money on the streets to fund local municipalities, not to mention the private sector, which will result in job losses. Anchorage residents without jobs will have reduced funds to pay their mortgages. Real estate defaults will rise and the principal funding sources of the Municipality of Anchorage will be at risk.

That source of funding, of course, is real estate tax assessment. By 2017, real estate prices will drop, resulting in lower municipal real estate tax assessments.

The Municipality of Anchorage has not yet grasped the seriousness of the impending financial calamity and is currently hiring more police and support staff. Rather than cut municipal expenses, the Municipality of Anchorage is seeking new funding sources. The new funding would come from seniors and disabled veterans through the elimination of the state-mandated home tax exemption.

Local municipalities through their lobbyists and friendly state legislators have drafted SB 183 and HB 338, which take away the state-mandated home tax exemption for seniors and disabled veterans.

The state-mandated home tax exemption benefits Alaskans because it serves a “public purpose” (AK. Constitution Article 9 Sec. 4 and 6). The public purpose associated with the state-mandated home tax exemption for seniors and disabled veterans is the preservation of Alaska’s unique history and cultures. Alaska’s elders, who treasure, share and teach the richness of their cultural heritage, strengthen and sustain Alaska’s uniqueness as a state. Eliminating the state-mandated home tax exemption for elders could force many to leave the state, thus thwarting and jeopardizing the public purpose of the state-mandated home tax exemption.

Alaska’s pioneers sustain and protect Alaska’s past and embed our history into Alaska’s present and future.

Alaska’s disabled veterans, who served their country and suffered injury, also contribute to Alaska’s heritage and richness through their selfless acts. Removing the state-mandated home tax exemption for disabled veterans could force many of them to leave the state, thus thwarting and jeopardizing the public purpose of the state-mandated real estate tax exemption benefit.

If you believe the real estate home tax exemption codified in AS 29.45.050 serves a valid state public purpose, then contact your legislators and tell them that they should vote against HB338 and SB 183.

Sources for information found in this article:

• AS 29.45.030, AS 29.45.050

• Constitution of Alaska Art. 9 Sec. 4 and 6

• January 2016 Alaska Economic Trends Magazine

Leonard T. Kelley is an Older Persons Action Group, Inc. board member.