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Senior, disabled vet hardship exemption language gets narrower

Posted: Tuesday, November 09, 2010

The City and Borough of Juneau Assembly on Monday night narrowed language in a city ordinance that allows senior citizens and disabled veterans to get a hardship exemption on their property taxes.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

This change in the ordinance does not affect the $150,000 property tax exemption seniors and disabled veterans already get regardless of hardship or income.

This only affects the hardship exemption, which kicked in if a senior or disabled veterans' property tax was more than 2 percent of their income.

The Assembly considered a finance committee and Committee of the Whole recommendation setting an income limit of 400 percent of the federal household poverty guidelines for Alaska. Extraordinary or extenuating circumstances could be taken into consideration by the city manager. It also would give the ability for the assembly to grant a hardship for up to 100 percent of the applicant's tax bill for cases of extreme hardship.

Assemblywoman Ruth Danner asked to change the income consideration guidelines to median household income to better reflect circumstances in Juneau, rather than statewide. She suggested it be at 115 percent of the median family income as calculated by HUD.

"This is a very challenging issue," she said. "The original hardship exemption was something the state provided for municipalities in a way they can support their senior citizens and disabled veterans when there was a hardship. Unfortunately, the language doesn't define what is a hardship. The challenge is now we find ourselves in a situation that is unsustainable. We can't simply throw open the doors to allow every single senior and every single veteran. The cost to the city - property taxes would have to be raised for all non-seniors and non-veterans."

Brian Reeve, a disabled U.S. Navy veteran who served three tours in Vietnam, said he didn't want anything taken away from veterans.

"To cut any program for vets is totally not right," Reeve said. "I don't want to see anything taken away from me because of a few bucks. I am a hardship and I'm also a part of the community."

Beverly Ward said she is approaching 65 and had recently done research on the senior tax exemptions. She found that as a widow of someone 65 or older she would have been eligible for these exemptions three years ago.

She wanted to know if the city was considering disabled veterans payments or social security payments in gross income. Ward said most public assistance options do not consider it. She did not get an answer. Ward also suggested they consider a sliding scale since seniors "don't just fit one size." She said they range from the poor widow to the very wealthy, but most live on fixed incomes. The 400 percent poverty level figure translates to about $72,000. She suggested those households earning $72,000 or less should receive hardship status if its tax bill exceeded 2 percent of its total income. Those households earning between $72,000 and $85,000 would get hardship relief if property taxes exceeded 3 percent of total income.

Danner said they couldn't do a sliding scale because Alaska law stipulates the 2 percent and only that.

Assemblymembers asked city finance director Craig Duncan how many of the 185 people who applied for the hardship exemption this past year would qualify under either scenario - 95 would. He didn't have figures on what either option could cost the city, but he did know that 1,300 seniors and veterans apply for the regular property tax exemption - so essentially if they did not modify the ordinance all could potentially apply and receive a hardship exemption. He ultimately recommended Danner's proposal.

The Assembly unanimously approved Danner's amendment, but changed the hardship point to 120 percent of median family income as the guideline with the remainder of the original language intact. Assemblyman Merrill Sanford also asked for a sunset clause where the Assembly will review the exemption in two years to evaluate costs and effectiveness.

The ordinance update also makes changes to include same-sex domestic partners as eligible to comply with Alaska's Constitution, however no discussion took place regarding this change.

• Contact reporter Sarah Day at 523-2279 or at sarah.day@ juneauempire.com.



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