FAIRBANKS — The assembly is deciding what message, if any, to send to state leaders about costly property tax exemptions for seniors and disabled veterans Thursday.
One resolution asks for the tax breaks to be removed from state law. A substitute resolution calls on the state to reimburse the borough for the cost of the exemptions.
Fairbanks North Star Borough Mayor Bryce Ward came under fire two weeks ago for his proposal asking for the exemptions to be decided locally.
“I didn’t mean to upset folks the way that we did,” Ward said on a video posted on the borough’s Facebook page.
His resolution was on the assembly agenda for a vote on March 28 but the meeting ran too long and it was postponed.
At issue is a state law requiring municipalities to exempt the first $150,000 of property owned by a person over age 65 or a disabled veteran from taxation. On top of that, seniors and disabled veterans also qualify for the $50,000 homeowner tax break for a total of $200,000 that can be exempt from taxation.
An estimated $10 million worth of property taxes was shifted to the rest of the taxpayers as a result of the exemptions last year, according to borough numbers.
Ward said on the Facebook video that the community could debate the issue and potentially increase or decrease the property tax exemptions if it were to go with a local option.
State law discusses reimbursing municipalities for the tax breaks but that hasn’t happened since a partial payment was made to the borough in 1997, according to Ward. The exemptions have been in place since 1973.
Borough leaders have been concerned about the cost of the tax breaks for decades.
Resolutions passed by the Borough Assembly in 1991 and 1998 ask the state to pay for the program.
A 1993 resolution calls for a local vote on the tax exemptions and for the state to grant municipalities the power to decide the exemptions based on need.
Assemblywomen Leah Berman Williams and Marna Sanford are sponsors of the substitute resolution.
Their measure states that “the senior citizens and disabled veterans property tax exemption is an important support to the quality of life of those groups.”
The state ought to reimburse the borough for tax revenues lost due to the exemptions, the resolution states.
The proposal removes language calling on the tax breaks to be withdrawn from state law.
Contact staff writer Amanda Bohman at 459-7587. Follow her on Twitter: @FDNMborough.