- Associated Press - Friday, June 24, 2016

KENAI, Alaska (AP) - Kenai Peninsula officials have voted to send a measure that would double the cap on taxable purchases to the October ballot, while a proposal to phase out property tax exemptions for senior citizens will get further consideration.

The Kenai Peninsula Borough Assembly discussed the two ordinances amending the borough’s tax code this week. Both measures require voter approval before taking effect next year, The Peninsula Clarion reported (http://bit.ly/28WRCxH).

One measure seeks to raise the maximum taxable amount of a single sale from $500 to $1,000, while residential rentals would be exempted. If implemented, it would be the first time the cap has been raised since it was set in 1965. The cap would have been at more than $3,000 this year if it had kept up with inflation, according to the ordinance.

The borough has seen most of its general fund revenue come from property taxes than sales tax in recent years, and that disparity is expected to continue growing. Raising the sales tax cap would generate about $3.6 million each year, according to a memo to the assembly from Larry Persily, special assistant to Borough Mayor Mike Navarre.

Officials are also considering ending the borough’s $150,000 senior property tax exemption, as the average age of Kenai Peninsula residents grows. The median age on the peninsula was 40.5 in 2014, with approximately 25 percent of the population falling between 50 and 64 years old, according to the U.S. Census Bureau.

Between 2009 and 2015, the number of properties with a senior tax exemption increased from 2,897 to 4,162. The total value of senior-owned residential property in the borough exempt from property tax climbed to $815 million in 2015, according to another memo from Persily.

At the Tuesday assembly meeting, Navarre encouraged assembly members to take action on the senior tax exemption, saying the younger population will carry more of the tax burden if nothing is done.

“The senior population is growing at 10 times the rate of the regular population,” Navarre said. “If we get to a point where we have 50 percent seniors and 50 percent non-seniors, should the non-seniors pay twice as much in order to pay for the services for the seniors?”

Opponents of phasing out the exemption argued it would deter people from coming to the peninsula and encourage older residents to move away.

The assembly postponed a decision about the senior property tax exemption until its July 26 meeting, when it will have to decide on the measure in order to put it on the ballot for the election in October.

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Information from: (Kenai, Alaska) Peninsula Clarion, http://www.peninsulaclarion.com

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