Haines Borough Mayor Stephanie Scott attended the Alaska Conference of Mayors and Alaska Municipal League meetings in Nome last month, where the groups discussed how to address the financial burden created by the senior citizen property tax exemption.
Alaska Municipal League executive director Kathy Wasserman recommended the group adopt the issue as a priority and urge the Alaska Legislature to either reimburse municipalities for revenue lost through the exemption, or repeal the law mandating the exemption, Scott said.
An exemption relieves an applicant of paying taxes on the first $150,000 of their home’s assessed value.
AML hasn’t yet set its 2015 priorities. Priorities will be finalized at AML’s annual meeting in November, Scott said.
According to Wasserman’s recommendation, local governments would be given control to implement their own senior property tax exemptions if they choose.
According to Alaska Statute, municipalities are required to offer the exemption, and the state is required to reimburse municipalities for revenue lost. However, the state eliminated reimbursements in 1996.
The borough estimates the state-mandated exemption will cost the municipality $310,000 in lost property taxes in fiscal year 2015, up from $270,000 last year. Borough property taxes brought in $59,500 less this year than the borough projected.
Last year, municipalities statewide exempted nearly $60 million in property taxes due to the exemption. The exemption is expected to take an increasing bite of municipal budgets statewide, as Baby Boomers move into eligibility.