M E M O R A N D U M 05-48(A)

TO: MAYOR HORNADAY AND HOMER CITY COUNCIL

FROM: WALT WREDE, CITY MANAGER AND

MARY L. CALHOUN, CMC, CITY CLERK

REQUST: COUNCILMEMBER WYTHE

DATE: MARCH 8, 2005

SUBJ: SENIOR PROPERTY TAX/DISABLED VETERANS TAX EXEMPTION.

Information from AML:

A major part of the platform, identified by the AML Board of Directors, is to find a solution to the Senior Property Tax/Disabled Veterans Tax Exemption. Currently, Title 29.45.030(e) reads as follows:

The real property owned and occupied as the primary residence and permanent place of abode by a resident 65 years of age or older; disabled veteran; or resident at least 60 years old who is the widow or widower of a person who qualified for an exemption.....is exempt from taxation on the first $150,000 of the assessed value of the real property.

Title 29.45.030(g) reads:

The state shall reimburse a borough or city, as appropriate, for the real property tax revenues lost to it by the operation of (e) of this section.

As you know, most cities and boroughs are fully committed to providing an exemption of some sort to senior/veterans. However, due to escalating assessments; an increase of seniors in Alaska's population; and the lack of any reimbursement from the state, this expense is becoming quite difficult for municipalities that impose a property tax.

The Board of Directors has identified their position on this issue as:

1. Full or partial reimbursement as per Title 29.45.030(g). Reimbursement could serve as revenue sharing for communities impacted by this issue, while then making a revenue sharing payment necessary for communities that do not impose a property tax.

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Memorandum 05-50

City of Homer

2. A program, supported by a change in Title 29, that might lower the exemption cap to $50,000 to be reimbursed by the state and the remainder of the exemption to be asset/needs/equity based .

The Board of Directors would ask that all municipal councils and assemblies not only be aware of this issue, but discuss how it affects your community and what your position would be based on the above two scenarios or any other scenario. The Board took the position of not advocating for the repeal of the Title 29 reimbursement clause, as they felt making this issue a local option was not a positive solution.

We would ask that your Assembly/Council:

1. Take a position on this issue;

2. Submit letters and resolutions supporting a broad-based approach to this issue;

3. Talk individually to your Legislators about the financial need to enforce the desired legislation.

RECOMMENDATION:

Council decide a direction regarding the exemption issues for submission of a Resolution for the March 29, 2005 Regular Council Meeting.

Amendment: "Direct the Manager to prepare a Resolution that supports the continuation of Senior Tax Exemption, but urges the Legislature to reimburse the Cities as they are required to do by law and includes the Veterans."

Fiscal Note: NA