Kenai Peninsula Borough voters will have their say on whether the borough’s optional senior property tax exemption will be phased out.
The borough assembly voted at its meeting Tuesday to place a question on the October municipal ballot, seeking voter approval to phase out the borough’s $150,000 property tax exemption for seniors.
Currently, seniors in the borough receive $350,000 in property tax exemptions — $150,000 mandated by the state, $150,000 offered by the borough and another $50,000 from the borough for all residential property owners.
“The minimum exemption you will ever receive is $200,000. It simply phases out the optional $150,000,” Assembly member Gary Knopp said.
Current seniors and anyone turning 65 next year will continue to receive $350,000 in exemptions. After that, residents turning 65 over the next six years will get lower levels of exemption, which they will continue to receive in perpetuity. Seniors turning 65 in 2024 or after won’t get any additional exemption.
Larry Persily, assistant to the mayor, said that’s still generous, compared to the rest of the state. Only the North Slope Borough, with $600 million in savings, offers more.
“But we’re competitive,” Persily said. “We’re equal or stack up very well against the next two, Skagway and Mat-Su, and have a better senior benefit than 32 other municipalities in the state.”
Borough Mayor Mike Navarre says the phase-out was created to address changing demographics in the borough. From 2000 to 2030, the senior population is expected to grow at a rate of 300 percent compared to the rest of the population of the borough, according to state estimates. That means the property tax burden will increasingly shift to younger residents, Navarre says.
The borough will continue to offer its hardship exemption for low-income seniors, so their property taxes can’t exceed 2 percent of their annual income. But the state doesn’t allow a hardship exemption for those under 65, Navarre says.
“There are many seniors on fixed incomes,” Navarre said. “Many other people are on fixed incomes. Many are low income. People at various ages have a hardship.”
The majority of public testimony over the past few meetings has been against the ordinance. Linda Hutchings, of Soldotna, spoke in favor Tuesday.
“I look at young families paying a higher price for their taxes,” Hutchings said. “As a senior, I like my exemption, but I understand we need to tighten our belt and give more to younger people to encourage them to come back to our area and build an economy.”
The assembly voted seven to one to put the measure on the ballot, with assembly member Wayne Ogle opposing the ordinance.
Borough voters will see the question on the municipal ballot Oct. 4. More information on the measure can be found on the mayor’s page on the borough’s website, www.kpb.us.