Mat-Su assembly considers additional property tax exemption; tidal power project test at borough’s Port MacKenzie announced

The Matanuska Susitna Borough Assembly is considering an additional property tax exemption for senior citizens and disabled veterans who are on fixed incomes and being hit hard by inflation.

The proposal was introduced and discussed Tuesday at the assembly’s regular April meeting but action was delayed until the next meeting to consider changes. If the assembly approves it will have to approve the additional exemption in the fall municipal election.

The exemption would be on top of an existing borough senior citizen and disabled veteran exemption and a senior citizen exemption mandated by the state.

Existing property tax exemptions already total $17.55 million per year in revenue foregone by the borough, finance director Cheyenne Heindel told the assembly. The additional exemption would add about $2.9 million to that, she said.

The revenue reduction will have to be made up foin some way, either through budget cuts or other revenues, Heindel said.

Currently, the mandated state senior citizen exemption lowers a residential property value by about $150,000. The borough’s seniors and disabled veterans’ exemption adds an additional $68,000 reduction for those qualifying.

The added exemption would bring the combined exemption, for all three, to about $264,000, Heindel said. There are now about 3,100 senior citizens living in Mat-Su along with about 1,140 disabled veteran, she told the assembly.

The proposal drew mixed comments among assembly members and from some of the public present at the meeting. One local resident, Todd Smoldon, commented in the open audience participation portion of the meeting, pointing out that many senior citizens have pensions and are not low income.

They would enjoy the benefit of the added exemption.However, the burden would be shifted to borough taxpayers who are not seniors or disabled veterans but who have medium to low incomes, Smoldon said.

Other comments touched on the effects of inflation on fixed incomes. Many employed people will receive pay increases as employers scramble to retain workers, but those with fixed income have no way of offsetting the pain of inflation.

The assembly is considering amendments to the proposal that would deal with this. An idea being considered is tying the exemption amount to Social Security annual adjustments for inflation. Another is linking it to the federal housing cost index for Anchorage and Mat-Su that is updated yearly.

Alaska community leaders including in Mat-Su are looking for ways to encourage senior citizens to remain in the state when they retire rather than moving to the Lower 48 states. It’s a tough battle, however, because of Alaska’s winter weather high costs.

In another development at the Tuesday meeting borough manager Mike Brown told the assembly that Ocean Renewable Power Systems, or OPRC, has signed an agreement to use Port MacKenzie to test a tidal energy power generation project using a technology the company has developed at Igiugig, a southwest Alaska village.

The Igiugig system, which uses ORPC’s RivGen Power System, was installed in 2014 and upgraded in 2015, according to the company’s website. It is now considered proven technology for river flow generation. For Cook Inlet the company is also conducting tests at East Foreland, near Kenai on the Inlet’s east side, in a partnership with Homer Electric Association. If the Cook Inlet projects are developed they would be the first tidal energy projects in the U.S. to harness ocean energy for local uses, ORPC said in its announcement.

The immediate purpose at Port MacKenzie would be to use the tidal energy to power cathodic protection, which protects the port’s underwater structures from corrosion but which also requires power from the local grid.

“This energy source (tidal power) is virtually limitless and would cover all of the port’s electrical costs,” the borough’s port director, Therese Dolan, said in an announcement made Tuesday by ORPC.

If the equipment works it could be scaled up to produce power into the regional electric grid.

There are challenges, of course. The company will first do a site environmental review, which will include consideration of endangered beluga whales in Cook Inlet.

Also, there are potential problems with Cook Inlet’s notorious silt, and damage from ice.

ORPC faced environmental challenges at its Igiugig project and overca,e them. These included debris in the river and, most important, potential effects on salmon.