Senior sales tax vote on Monday

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.

More in News

Jasmine Chavez, a crew member aboard the Quantum of the Seas cruise ship, waves to her family during a cell phone conversation after disembarking from the ship at Marine Park on May 10. (Mark Sabbatini / Juneau Empire file photo)
Ships in port for the week of June 15

Here’s what to expect this week.

(Michael Penn / Juneau Empire file photo)
Police calls for Thursday, June 13, 2024

This report contains public information from law enforcement and public safety agencies.

Bill Thomas, a former Republican state representative from Haines, announced Friday he is dropping out of the race for the District 3 House seat this fall. (U.S. Sustainability Alliance photo)
Bill Thomas drops out of District 3 House race, says there isn’t time for fishing and campaigning

Haines Republican cites rough start to commercial season; incumbent Andi Story now unopposed.

U.S. Rep. Mary Peltola, D-Alaska, speaks at the Alaska Democratic Party’s state convention on May 18 at Elizabeth Peratrovich Hall. (Mark Sabbatini / Juneau Empire file photo)
Peltola among few Democrats to vote for annual defense bill loaded with GOP ‘culture war’ amendments

Alaska congresswoman expresses confidence “poison pills” will be removed from final legislation.

A celebratory sign stands outside Goldbelt Inc.’s new building during the Alaska Native Regional Corporation’s 50th-anniversary celebration on Jan. 4. (Mark Sabbatini / Juneau Empire file photo)
Medical company sues Goldbelt for at least $30M in contract dispute involving COVID-19 vaccine needles

Company says it was stuck with massive stock of useless needles due to improper specs from Goldbelt.

(Michael Penn / Juneau Empire file photo)
Police calls for Wednesday, June 12, 2024

This report contains public information from law enforcement and public safety agencies.

A yearling black bear waits for its mother to return. Most likely she won’t. This time of year juvenile bears are separated, sometimes forcibly, by their mothers as families break up during mating season. (Photo courtesy K. McGuire)
Bearing witness: Young bears get the boot from mom

With mating season for adults underway, juveniles seek out easy food sources in neighborhoods.

A chart shows COVID-19 pathogen levels at the Mendenhall wastewater treatment plant during the past three months. (Data from the U.S. Centers for Disease Control and Prevention’s National Wastewater Surveillance System)
Juneau seeing another increase in COVID-19 cases, but a scarcity of self-test kits

SEARHC, Juneau Drug have limited kits; other locations expect more by Saturday.

Gov. Mike Dunleavy speaks to reporters during a news conference Feb. 7. (James Brooks/Alaska Beacon)
Gov. Dunleavy picks second ex-talk radio host for lucrative fish job after first rejected

Rick Green will serve at least through Legislature’s next confirmation votes in the spring of 2025.

Most Read