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Sales tax committee takes no action regarding senior exemptions

 

Kyle Clayton / Petersburg Pilot

Community members gave comments to the sales tax ordinance review committee.

The sales tax ordinance review committee didn't come to a consensus on any changes to the senior exemption and will meet twice more before making final recommendations to the borough assembly.

The committee is charged with reviewing the sales tax code and to make any changes so the borough can generate an equal or greater amount of revenue so it doesn't have to decrease services or raise property taxes.

More than ten people attended the meeting and several spoke against eliminating the exemption.

Jackie Morrison spoke during the public comment period and asked the committee if making the sales tax rate more equitable could be a solution.

"I don't want to be a burden on the young kids, that they have to pay six percent and I don't have to pay anything...is it a thought that maybe we could all split it," Jackie said. "That we could pay three percent and you young kids can pay three percent?"

Committee member Sue Flint said lowering the tax across the board has been a consideration since day one.

Glo Wollen, resident and Harbormaster, said the list of senior exemptions and exemptions in general is getting too high.

"It makes me sad that some people feel that the borough is out to get everybody but I just look through this list and it's so huge," Wollen said. "It's almost 500 (senior) exemptions now. For somebody who bought her first piece of property when I was 16, I have been paying property tax for a long time. I just feel like it's getting to be a lot."

Since last Friday's meeting there are 479 senior exemption cards-17 more since the end of last August when the committee began conducting meetings.

Some worry that the growing senior population will eventually strain borough coffers.

Flint read an email from Borough Assembly member John Hoag.

"...the projection of the number of seniors who will qualify for an exemption will double in the next ten years...continuing the exemption without any modification would be unfair to the rest of the community as too high a percentage of the population will be exempt from sales tax," Flint read.

In the message, Hoag suggested the senior exemption be based on income using a confidential tax return as an indicator.

Committee member Lee Corrao took issue with the statistic.

"I find it not terribly credible to say it's going to double to 30 percent over the next 15 to 20 years especially because they're relying on people outside of our borough to inflate that number," Corrao said. "The argument begins to lose some of its integrity when you factor in those considerations. It's not to say other arguments might be made in favor of changing the way that we do tax exemptions."

The statistic in question comes from the Alaska Department of Labor and Workforce Development data, which projects an aging population combined with population loss during the next two decades. The data includes residents from Kake and other outlying areas.

Hillary Whitethorn, committee member, echoed Wollen's idea that the group should discuss the possibility of limiting the senior exemption to essential items such as food and fuel.

John Murgas, committee member, said defining what is essential to who would be a problem.

The committee will meet twice in February. During its first meeting it will discuss the merit of tax-free days as well as other options to increase tax revenue including taxing alcohol and tobacco and pull-tabs.

During its second meeting the committee will prepare its recommendations to present to the borough assembly. If and when the assembly approves any recommendations made by the committee, changes will appear on the ballot for voter approval in October.

Borough-wide sales tax exemptions:

Elderly: $4,126,494.04

Government: $16,420,226.33

Resale: $6,853,543.45

Out-of-town: $13,765,716.41

*Other: $3,666,803.50

$1,200 tax cap: $16,127,921.27

Total: $60,960,705.00

*Other consists of WIC/Food stamps, air charters, long-term rentals, non-profits, warranty work and freight.

 

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