Voters to decide property tax exemption

PALMER — Voters this fall will have a chance to extend the property tax exemption the Mat-Su Borough offers to seniors and disabled veterans.

“On rare occasions we take up issues that are significant and result in meaningful impacts to the people that live in the borough,” said Mat-Su Borough Assemblyman Ron Arvin, who brought the ordinance to the assembly Tuesday.

If voters in the Oct. 17 election choose to approve the exemption for seniors, disable and veterans, the first $218,000 of a home’s value would be exempt from taxation. Seniors and disabled veterans would only pay taxes on what’s left, so on a $230,000 house, only $12,000 would be taxable. The exemption would apply to disabled veterans and people more than 65 years old.

Arvin said, currently, a senior who can’t pay his taxes has to go to the assembly to seek such an exemption. At multiple meetings seniors and their family stood up to testify in front of a room full of people about their personal finances. Arvin called it “unconscionable.”

“I think it is frankly anti-American, I’ve said this before, that an individual, a couple, reaches their golden years… and they find themselves in a financial situation whereby they are unable to pay their property taxes and then they are dragged in front of the local governing body to ask for some kind of waiver or concession whereby they might be able to work out some kind of a payment plan where their property will not be taken from them.”

Seniors and their advocates also spoke in favor of the measure.

“A home is a senior’s greatest asset. Many seniors live on a fixed income. The property tax exemption would allow them to stay in their homes,” said Tom Stearns, representing the Wasilla Senior Center.

Jane Soeten said that the ordinance was a topic of conversation at the center, copies of it were on every table.

“A senior couple 65 and older are getting along just fine on their two social security checks, a little bit of savings and the other thing. Now one of them dies. Income is cut in half. What does a widow do?” she asked the assembly.

Arvin said out that the current exemption is $150,000 as mandated by state law plus an additional $20,000 from the borough. He said that the $170,000 exemption was an attempt to make the level at which seniors are exempt equal to the average borough home price. Since then, home prices have risen to where the average price is now more like $218,000.

“This is bringing things in harmony with the assessed value increase. It allows people to stay in their homes. It allows fewer people to have to be dragged in front of us to defend their situation,” he said.

Nobody voted against his ordinance, though Assemblyman Jim Sykes did say that he’d rather the borough proceed at a measured pace, bumping the exemption up $16,000 per year until reaching Arvin’s stated goal.

“I would just want to take it a little piece at a time so we’re not doing the whole thing all at once,” he said.

The assembly didn’t take his advice. Nor did it consent to another change he proposed: stating clearly in the language on the ballot just how much this will cost other borough taxpayers, which staff estimated at $2.4 million.

“There’s a presumption that this shifts the tax burden to others with this amendment when in fact that is not an appropriate conclusion,” Arvin said in response. “If this goes to the poll and passes then it will be incumbent upon this body then to reduce the cost of government, not shift it to someone else.”

Sykes disagreed.

“That revenue that isn’t taken in either is going to have consequences on what is not funded in the future or it may be raised somewhere else,” he said.

One change that was successful was Assemblyman Steve Colligan’s move to add a clause that would change the exemption every year to make it equal to the average home price that year.

“I think that would be an appropriate additional line item to put to that so that it actually accomplishes the goal,” Colligan said.

Contact Andrew Wellner at 352-2270 or andrew.wellner@frontiersman.com.