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Seniors stay tax-exempt

In a 5-4 vote, Assembly rejects recommendation to change sales-tax exemption

Posted: Wednesday, May 10, 2006

Juneau's seniors win.

There will be no changes to the city's senior sales-tax exemption anytime in the near future. A 5-4 vote Tuesday night by the Juneau Assembly Finance Committee determined that anyone 65 and older will remain unburdened by the city's 5 percent tax.

Juneau Assembly member Merrill Sanford made the motion to leave the coveted tax break as is.

"What Mom and Dad taught me is that seniors come first and kids second, and that we should take care of them any way we can," Sanford said. "I am getting emotional about this."

Juneau's parents and grandparents packed the chambers Tuesday night.

Assembly member Jonathan Anderson switched sides to join Sanford with Bob Doll, David Stone and Johan Dybdahl concurring. Anderson's vote tipped the decision.

"I believe in the democratic process, and people, especially younger folks, have spoken," Anderson said. "It seems there will be ways to shift the lost revenue and they are willing to bear the burden."

Mayor Bruce Botelho and Assembly members Jeff Bush, Randy Wanamaker and Daniel Peterson were opposed to ending further discussion. The Senior Sales Tax Exemption Task Force had recommended grandfathering in all seniors who reach the age of 65 by the end of this year. Those who turn 65 after Dec. 31 would not have been eligible for tax exemption until they reached 75.

"After looking at Juneau's finances and demographics, I just don't see how we can ignore this issue," said Wanamaker, who was task force chairman. "Many of us want to see something concrete done now, including seniors."

Those opposed to Sanford's motion expressed fears of ballooning debt with the growing number of seniors. The exemption as stands will include seniors statewide.

"Many of us may agree that this will be an escalating problem, but there may not be the political will to do anything," Assembly member Bush said. "It will only get worse with the number of seniors increasing."

Two task force members had written dissenting opinions after the group recommended raising the eligibility age. Minority report authors Joe Sonneman and Lorilyn Swanson opposed any attempt to change the tax.

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"The city has not shown why the exemption should be changed or eliminated, nor where savings would go," Sanford said. "The debate has caused enough pain and suffering in the city, particularly for anxious seniors feeling attacked."

The vote was good news for 86-year-old Bea Shepard, who has lived in Juneau for 60 years. She, like thousands of Juneau seniors, lives on a fixed income. She is fortunate to have a fairly good retirement, she said, but rising prices are causing her and others to worry.

"Every month I receive increasing costs like a higher gas or oil bill," Shepard said. "Everything else is going up, but my fixed retirement has not changed."

City officials estimate the sales-tax exemption led to $1.3 million of uncollected revenue in 2005. It is estimated 1,400 to 1,700 seniors take part in the program. They have asserted the numbers will go up.

Last week the committee heard from the task force. Dybdahl attempted to indefinitely table the task force recommendation and any discussion of changing or eliminating the senior sales tax exemption, but the Assembly defeated his motion 5-4 at the time.



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