Seniors fear loss of city tax breaks

Citizens worry claims of 'abuse' of system will lead to loss of exemption

Posted: Friday, November 18, 2005

Juneau senior citizens are reacting to city officials' accusations that seniors are abusing their city sales-tax exemption.

The Juneau Commission on Aging passed a resolution this month saying there is no "verifiable evidence" of seniors abusing the program. The resolution also says that seniors are valuable community members and that removing the exemption would harm those on fixed incomes.

Commission chairwoman Lorilyn Swanson already presented the resolution to the Juneau Assembly Finance Committee.

"I see at least the mayor and some of the other Assembly members looking for an opening on how to attack the senior sales-tax exemption," senior advocate Joe Sonneman said at a commission meeting last week.

The city sales tax adds 5 percent to the cost of goods and services.

Swanson said that during the last six years, as the city considered striking the exemption, city Finance Director Craig Duncan was coming to the commission meetings and asking about abuse.

"That was one of his reasons for going to the Assembly and wanting (the exemption) taken out," Swanson said.

Duncan said the city occasionally receives complaints from merchants that seniors are buying goods for other people.

Some examples include merchants spotting seniors buying furniture to be delivered to their children's homes, seniors paying for meals for everyone at the table, or buying presents for relatives and friends, Duncan said.

Marie Darlin, also with the commission, said two or three merchants have testified to the Assembly about abuse.

Swanson said a few are taking advantage of the system, but the majority of seniors are cautious about their spending.

"I think seniors appreciate the sales-tax exemption and understand they don't want to take any chances on losing it," Swanson said.

Duncan said the issue of abuse is generally noted in the decision-making process, but is not the focus of the proposal.

"As the population gets older and more people are exempt, the question is, who is going to pay for that?" Duncan said.

The members of the tax subcommittee - Mayor Bruce Botelho and Assembly members Jeff Bush and Randy Wanamaker - maintain that as the city's senior population will more than double over the next decade, the burden will be too great for other residents to subsidize the retiring baby boomers.

Duncan said the tax committee is eager to move the proposal along but Finance Committee chairman David Stone said he wanted Assembly members to do more research before voting on the proposal.

Duncan said the city has not done any formal research on abuse of the tax exemption and does not plan to in the future.

The exemption is offered to residents over the age of 65 and participants must fill out an application with a clause saying the applicant will lose his or her exemption if caught abusing it. But the city has never revoked a senior's exemption because of abuse, Duncan said.

Seniors are allowed to purchase goods for their spouses, but not anyone else, Duncan said. They must present a photo exemption card to the merchant when making purchases.

• Andrew Petty can be reached at

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