When the Soboleff-McRae Veterans Village applied for a property tax exemption for the second floor of its downtown building in 2014, the Haines Borough Assembly’s denial of the request sparked a discussion on how nonprofits apply and qualify for property tax exemptions.
Last week, almost 18 months later, the assembly put into practice the new rules it developed over the last year and approved property tax exemptions for five properties. But it didn’t do so without considerable hemming and hawing.
The assembly unanimously voted March 29 to approve exemptions for the Southeast Alaska State Fair, Haines Animal Rescue Kennel, Haines Senior Village, American Bald Eagle Foundation and a parcel of Allen Road property also owned by the ABEF. Assembly member George Campbell was absent.
That amounts to more than $43,300 in property tax breaks, according to chief fiscal officer Jila Stuart.
Though all assembly members present voted to approve the applications at the recommendation of borough assessor Dean Olsen, two members of the group expressed misgivings similar to those voiced when the assembly denied the Veterans Village application.
Organizations like the Senior Village, while valuable to the community, have certain age and income qualifications for living there, assembly member Mike Case pointed out. To give a property tax exemption to one rental organization and not to another seemed “not correct,” he said. “Everybody is not being treated equally.”
Assembly member Margaret Friedenauer also questioned whether the Senior Village qualified as a “community purpose,” as community use of the facility is limited to certain brackets of the population, including seniors and low-income residents.
Assessor Olsen said that not everyone goes to the fair and not everyone uses HARK, either, but those applications weren’t generating controversy. Friedenauer countered that there is a difference between using a facility and being able to use a facility.
“Everybody can go to the fair. Not everybody does. Everybody can use HARK. Not everybody does or needs to. The question is, ‘Can everybody reside in the Veterans Village if they want to and can everybody reside in the Senior Village if they want to?’” Friedenauer said.
Two members of the public spoke to remind assembly members that the more property tax exemptions they granted, the more burden is placed on others to make up lost tax revenue.
Haines Chamber of Commerce executive director Debra Schnabel pointed out that the burden especially falls on younger families, as seniors qualify for property tax exemptions through a state mandate.
“We have to be careful not to put the burden of the community on too small of a group of taxpayers, and that would be businesses and homeowners,” she said.
Schnabel urged the assembly to consider Payment in Lieu of Taxes (PILT), a system the federal government uses to compensate communities for not paying property taxes on federally-owned land inside their borders. The borough could develop a policy to have those nonprofits that qualify for property tax breaks contribute in some other way, she said.
“It costs a lot to keep roads and streets and sewers and all the rest of that operating, and it would be certainly okay, I think, to ask nonprofits that have activities that utilize those services to also pay something in lieu of taxes,” Schnabel said.
Resident Heather Lende echoed Schnabel’s concern.
“I’ve been following the state budget and I’m really concerned about what that could mean for our community, and especially for young families. I’m concerned about placing too much burden on them and having the rest of us not pay as much when perhaps we are more able,” Lende said. “I think we are coming into a time where we’re going to have to not go with the status quo and to think of creative ways where we can raise our own revenues in the community.”
Assessor Olsen said applications from Takshanuk and the Chilkat Valley Historical Society will be on the assembly’s April 12 agenda.