City leaders fear legacy of growing debt

Younger generations to inherit costs of senior and retirement programs

Posted: Monday, April 24, 2006

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As baby boomers age, the city has begun a debate over a tax exemption that will increasingly cost the government but aid the aged. It comes as other expenses are piling up.

"I am uncomfortable with putting so much debt onto the shoulders of our younger generations," Juneau Assembly member Jonathan Anderson said. "The current generation is paying for those who are retired."

Anderson is chairman of the Business and Public Administration Department at the University of Alaska Southeast, and an AARP member.

He cited the senior sales-tax exemption, the city's public employees' retirement system - or PERS - and the teachers' retirement system as heavy burdens on the city's taxpayers.

"We have to look closely at how to fairly distribute the burden in Juneau," Anderson said. "We hear retired and seniors say that the government owes me, but I want them to understand they are asking the next-door neighbor and single mothers to pay their way."

The city now pays more than 21 percent into the PERS system. That means for every $100 an employee earns, the employer must pay about $21 toward that employee's retirement. That rate will cost the city more than $2 million in fiscal year 2007, which runs from July 2006 through June 2007.

The sales tax exemption led to $1.3 million of uncollected revenue in 2005. It is estimated between 1,400 to 1,700 seniors take part in the program.

"Juneau has been home for 88 years," Dean Williams said. "All these years we kept this place the capital through hard work and now all these young folks are complaining that we receive too much."

No person who is 70 or 80 years old is going to work again, so keeping these programs is essential to the welfare of seniors and those retired, Williams said. Most young people are getting great benefits in Juneau, including the ice rink, Eaglecrest and sports programs, he said.

"We hear, 'Oh, there is nothing for my little boy or girl to do in Juneau,' which is not true," Williams said. "I have seen more sports here than nearly every town I visit, and there are only 30,000 people."

Williams has many suggestions for improving programs, including the senior sales-tax exemption, from which he said rich seniors could be excluded.

"I am not banking on Social Security, so I have set up a 401(k)," 33-year-old Ron Dangeli said. "I hope one day to make it to my senior years, so I support the city continuing their senior programs."

The city's retirement and senior sales-tax exemption programs should stay in place, Dangeli said.

"The taxes placed on others to support these programs seem to be negligible."

Fiscal irresponsibility both nationally and locally must be paid off at some time, by someone, Anderson said.

"Our youngest voters have the worst turnout, while our oldest show up in force," Anderson said. "We believe in doing things, just not paying for it."

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