The tsunami generated by Wednesday’s earthquake in Chile missed Juneau, but there is another tsunami headed straight for the City and Borough’s Assembly Chambers. It’s the silver tsunami, and it is expected to hit during the public comment portion of Monday’s Assembly meeting as the Assembly discusses — and possibly votes on — an ordinance restricting the senior sales tax exemption.

Seniors around town are already abuzz about the possible change, but that buzz includes plenty of misinformation, CBJ Finance Director Bob Bartholomew said.

What will the proposed changes do?

If passed, the ordinance before the Assembly will restrict the senior sales tax exemption to essential items.

Seniors will not have to pay taxes on heating fuel, electricity, city water and sewage utilities or food.

These restrictions will only be applicable to seniors making more than two and a half times the federal poverty level. Seniors living on an income less than that will continue to benefit from the tax exemption, albeit in a slightly different way.

All seniors will be required to pay sales tax at the point of sale on any nonessential items beginning Jan. 1, Bartholomew said. A senior couple making less than $49,800 per year — or a single senior making less than $36,800 — will be eligible for a tax rebate calculated based on income.

“The goal is to keep them whole,” Bartholomew said of seniors who will still qualify for the exemption. “The Assembly wanted to provide more assistance to low-income seniors. We believe that they’re being held harmless.”

The rebates will be awarded once per year in September, Bartholomew said. The maximum rebate for a single senior will be $325, and for a married couple it will be $650.

The rebate-based system means 99 percent of businesses in Juneau no longer have to deal with senior tax exemption cards, Bartholomew said. He also said that the Juneau Commission on Aging requested the rebate program to maintain anonymity for low-income seniors.

About 40 percent of Juneau’s seniors, about 1,600 people, will be eligible for the tax rebate, according to Bartholomew.

To what extent will these changes impact most seniors?

According to Bartholomew, not a lot because the majority of senior spending will still be tax exempt.

“The exemption is not going away,” Bartholomew said. “Sales to seniors will still be tax free on about 60 percent of what they purchase.”

Why make the change?

The city has been discussing eliminating, or at least restricting, the senior sales tax exemption since the late 1990s.

When the senior sales tax exemption was adopted in 1979, city officials thought it wouldn’t cost very much and it would help seniors, Bartholomew said. Juneau has far more seniors now, and the number of people older than 65 is increasing rapidly.

Juneau has twice as many seniors today as it did 15 years ago, when the city began talking about eliminating the tax exemption, and projections show that number will continue to grow at an even steeper rate.

As the number of seniors increases, so does the amount of exempted revenue. The city is now losing $5.78 million per year in tax revenue because of the exemption, double the amount of 10 years ago.

“It’s not that we don’t appreciate seniors and their contributions, Bartholomew said. “The exemption just isn’t sustainable.”

The city predicts that the proposed changes will net about $1 million per year in increased tax revenue. Currently, the city is losing about $400,000 in tax revenue each year as more people become available for the exemption, according to Bartholomew.