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Voters to be faced with property tax exemption measure

Aug. 28 election to decide statewide ballot question

Posted: August 7, 2012 - 12:02am

Alaskans will get to vote for lower property taxes during the August primary election, but no matter how they vote on Ballot Measure 1 it is not clear that they’ll actually see lower bills.

Juneau Assessor Robin Potter questioned whether Ballot Measure 1 should be before voters here at all.

The measure would allow those communities that choose to have a residential property tax exemption of up to $20,000 to raise that amount to $50,000. Juneau is not one of those cities.

“I don’t think the people in Juneau should be even voting on that because we don’t even have that as an ordinance here,” she said.

Still, just as the residents of Fairbanks will be voting on Ballot Measure 2, the Coastal Management program restoration, residents of Juneau and every other community will vote on Ballot Measure 1, even if they don’t impose a property tax or don’t have an exemption.

Such an exemption shifts the property tax burden from lower value property to higher values.

According to the state Department of Commerce, Community and Economic Development, four of the six municipalities that have adopted the exemption are the Fairbanks North Star Borough, Kenai Peninsula Borough, City of Valdez and the North Slope Borough, all of which have significant oil and gas infrastructure onto which they may shift taxes.

Fairbanks North Star Borough Assembly Member Nadine Winters said opposition from business interests in the Legislature blocked the possibility of getting legislators to raise the allowable exemption limit and forced them to go the initiative route.

“For a long time we wanted to get that exemption increased, be we were not successful in the Legislature, she said.

Winters said the business community isn’t unanimous in opposition, with real estate brokers split — those who handle residential property in favor, and those who handle raw land and commercial property opposed.

“A lot of people assume that it is going to be a tax shift, which is absolutely possible,” she said.

Governments also have the option of reducing spending instead of raising mill rates to make up for lost revenue, she said.

The Alaska Municipal League has not taken a stand on the issue, said Kathie Wasserman, the group’s executive director.

“As a rule AML has always been opposed to property tax exemptions,” she said.

In this case, however, with the Fairbanks North Star Borough being one of AML’s members, the group took no position, she said.

“It’s kind of a quandary for us,” she said.

Winters said she’s not surprised that the AML membership would oppose raising the allowable exemption.

“With that option is going to come some political pressure, it’s a normal reaction to not want to have that,” Winters said.

Anchorage Assessor Marty McGee, who said it lowers the tax base but doesn’t do anything to reduce the demand for services, wrote the opposition to Ballot Measure 1 in the Alaska Voter Pamphlet.

While it would benefit some homeowners, McGee acknowledged, it would shift costs to other homeowners, renters and business owners.

“This is not a good bargain, and is not good public policy,” he wrote.

“I totally concur with his opinion” in the pamphlet, Juneau’s Potter said.

“All it is going to do is transfer taxability to somewhere else,” she said.

To Winters, though, that was a good bargain based on Fairbanks numbers.

“For average homeowners, primary residence is only 420 bucks (in savings),” she said. “That’s not a huge amount of money but it’s 420 bucks that you can do something with,” she said.

The shift to others, Winters said, would likely be about $50 per $100,000 of assessed value.

“Giving residential taxpayers a break is a good thing,” Winters said, while people with a home valued at half a million dollars can afford the extra $250, she said.

Ballot Measure 1 will be on the Aug. 28 primary election ballot.

• Contact reporter Pat Forgey at 523-2250, or at patrick.forgey@juneauempire.com.

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