Four days before the scheduled end of the Alaska Legislature’s regular session, a Senate committee has proposed a major increase in the state’s property tax exemption for disabled veterans, widows and Alaskans 65 or older.<\/p>\n
On Sunday, the Senate Finance Committee proposed tripling the exemption<\/a> from $150,000 to $450,000. An eligible Alaskan whose home is worth that amount or less would pay no local property taxes.<\/p>\n Ken Alper, an aide to Olson, told members of the committee that he doesn’t know how much of a fiscal impact the change would have on cities and boroughs, but that it could be as much as $200 million.<\/p>\n Alaska state law says the state is supposed to reimburse municipalities for the existing exemption, but that hasn’t happened in decades, and Alper referred to the reimbursement as a “dormant statute.”<\/p>\n The proposal, which came as an amendment to House Bill 347<\/a>, from Rep. Julie Coulombe, R-Anchorage, surprised observers, even Coulombe herself.<\/p>\n “I obviously don’t support that,” she said.<\/p>\n “Obviously, I’m not happy about it. It’s like a $200 million unfunded mandate to municipalities. It’s devastating in so many ways to local communities,” she said.<\/p>\n Nils Andreassen is director of the Alaska Municipal League, a lobbying and coordination group for cities and boroughs.<\/p>\n “It’s entirely new. Nobody asked us what the impact would be or the consequences, but just knowing the numbers, it would be dramatic,” he said.<\/p>\n The state’s existing $150,000 property tax exemption results in about $100 million of canceled taxes. Andreassen said that because some homes are worth less than $450,000, he doesn’t expect the value of the change to be another $200 million, but it would still be massive, especially in communities with large retirement-age populations, such as Kodiak, Wrangell and Haines.<\/p>\n It would also be particularly hard on communities that do not have sales taxes and rely on property taxes, such as Anchorage.<\/p>\n Sen. Jesse Kiehl, D-Juneau, said the impact on Anchorage “would be quite a whack” and that he has “some deep concerns” about the idea.<\/p>\n The change, which applies to someone’s first (or primary) home, was among several proposed as a committee substitute arranged by Sen. Donny Olson, D-Golovin and co-chair of the finance committee.<\/p>\n Another change would increase the maximum optional municipal property tax exemption from $75,000 to $150,000.<\/p>\n The Senate Finance Committee also stripped out a provision that would allow communities to tax “blighted” property. That idea was proposed by Sen. Forrest Dunbar, D-Anchorage, in a separate bill<\/a>.<\/p>\n • James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. This article<\/a> originally appeared online at alaskabeacon.com. Alaska Beacon, an affiliate of States Newsroom, is an independent, nonpartisan news organization focused on connecting Alaskans to their state government.<\/em><\/p>\n <\/em><\/p>\n