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City eyes tax break as oil costs heat up

Deputy mayor says tax exemption would cost the municipality too much

Posted: Friday, November 04, 2005

A Juneau Assembly member proposes to stop taxing heating oil sold in the city from January through March.

The idea passed through the city's finance committee last week and will be introduced at noon today at the Assembly Chambers. The panel will likely vote on the issue during its next meeting on Nov. 21.

The price of heating oil in Juneau has skyrocketed this season to $2.88 per gallon, compared to $1.45 per gallon last fall. The national average is about $2.57 per gallon.

If approved, the exemption could not go into effect until Jan. 1.

"I still think it should be done," said Assembly member Johan Dybdahl, who proposed the idea. "It's the right thing to do."

The city collects a 5 percent tax on heating oil. For the January-March quarter under consideration, the city estimates the exemption would cost $440,000.

"It's a lot of money," said Deputy Mayor Randy Wanamaker, who is cautioning the Assembly against approving this temporary exemption.

Heating oil facts

Cost of heating oil last fall: $1.45 per gallon.

Cost of heating oil this season: $2.88 per gallon

City tax on heating oil: 5 percent.

What a tax exemption on oil would cost the city: $440,000.

Wanamaker said the Assembly's intentions are good, but there is too much about this proposal that the city does not know about. For instance, with a balanced budget in place, losing the money could mean cutting services or employment in the future.

Many Juneau homes are heated by electricity or other means and Wanamaker said he doesn't want those taxpayers to shoulder the burden.

Wanamaker said residents with large tanks may have already filled up for the winter, and the exemption "will come too late to do them any good."

The exemption would be given to businesses as well because the distinction cannot be made from those who work from home, Dybdahl said.

During the finance committee meeting, members asked if the city could afford the exemption while it was raking in more dollars from petroleum sales taxes.

City sales tax administrator Joan Roomsburg said Juneau has collected more taxes since oil prices rose, but not enough to be called a windfall.

Meanwhile, applications for energy assistance offered by the state have already increased 18 percent from last year, though the state just started accepting forms, said Mary Riggen-Ver, program coordinator for the Heating Assistance Program.

• Andrew Petty can be reached at andrew.petty@juneauempire.com



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