Boomers may bust city coffers

Sales tax exemption task force asks for public comments

Posted: Thursday, March 02, 2006

Debate will heat up this spring when the Juneau Assembly decides whether to continue a senior sales tax exemption.

A task force charged by the Juneau Finance Committee with developing an option to eliminate the controversial senior sales tax exemption Wednesday asked the public to comment on a list of possible options, Chairman Randy Wanamaker said. Wanamaker said the Juneau Assembly wants options from the task force, rather than opinions about the tax.

The task force is trying to answer two key questions, he said.

"If the senior tax exemption must be eliminated, what approach should the Assembly take in doing that?" Wanamaker said. "What alternative programs or policies should the Assembly consider for seniors if the exemption is eliminated?"

The task force will submit the final report sometime in April with recommendations to the Juneau Assembly. Wanamaker said it is imperative to plan for anticipated lost tax revenue as more people age into the tax exemption.

"The loss in uncollected revenue for the city is about $1.23 million a year now," Wanamaker said. "The current number of seniors are growing in Juneau and as baby boomers hit 65 and retire the numbers will increase more. We can expect to face about $5 million a year in lost revenues unless we plan ahead."

Senior Mary Lou Spartz said this is just singling out a group that would be hurt more than others. Seniors live on a limited income and this additional financial burden is a hardship, she said.

"We go through this talk all the time and of course it concerns us," Spartz said. "It seems very foolish to take away Social Security and retirement fresh from one resource."

Some have made false accusations that seniors sometimes buy items for their children or grandchildren and use the tax exemption for an unfair bargain, Spartz said.

"I do not know one senior who has done that" Spartz said. "If an 85-year-old buys a $35,000 sports car that is reaching."

Wanamaker said the uncollected revenue will fall on the shoulders of fewer people, particularly young people entering the work force. He said seniors are Juneau's wealthiest group, with 3.8 percent at or below poverty line, while 5.9 percent of people 25 and younger fall bellow the poverty line.

"We have a duty to ensure we tax all people as fair and equitable as possible," Wanamaker said. "City leaders have to be willing to consider unpopular issues and have to be fair to all citizens."

Seniors are finding Juneau more attractive for retirement, which is positive, but it also requires planning for the potential financial effects, City Manager Rod Swope said.

"This trend could be very economically significant," Swope said. "The senior issue is emotional and sometimes there is misinformation out there."

Wanamaker said state funds used to offset the senior sales tax exemption and the mandatory senior property tax exemption ended in 2003 with a one-time payment of $743,000. He said it was as high as $4 million, but diminished in the years before 2003.

Senior citizen Liz Lucas said seniors will "absolutely be involved in this debate" to safeguard their quality of life.

"I understand cities are going through hard times, but they are nibbling away at people on a fixed income," Lucas said. "Some of our seniors in Juneau have to ask themselves, 'Do I buy pills or cut them in half?'"

"If the senior sales tax exemption is lost there will be protest and written letters."

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