Council votes not to extend borough-level tax exemption to disabled veterans to Homer

After considering a move that would have granted a few disabled veterans an increased exemption on their property taxes, the Homer City Council decided against it.

The council members defeated ordinance 17-033(S) with a 4-1 vote at their Monday meeting after it had a public hearing. Council member Tom Stroozas, who introduced the ordinance, was the sole yes vote. Council member David Lewis, who previously voiced his support for the ordinance despite pointing out some potential imbalances he foresaw it creating, had an excused absence from the meeting.

The ordinance would have extended the Kenai Peninsula Borough’s code regarding tax exemptions for disabled veterans to those living in the city of Homer. According to borough code, “a disabled veteran, or a resident at least 60 years old who is the widow or widower of such person, is exempt from taxation in an unlimited amount.”

In Homer, the first $150,000 of assessed property value on a disabled veteran’s home is already mandatorily exempted by state law. According to the ordinance text, there were 10 veterans living in city limits in 2017 who had primary homes with assessed property values greater than that $150,000 for each.

The combined portion of those property values of those homes that isn’t currently exempted represents about $7,200 in property tax revenue for the city, according to the ordinance. Had the ordinance gone into effect, the veterans’ property assessments above $150,000 resulting in $7,200 of taxes would have also been exempt from property taxes.

There was only one member of the public who testified to the ordinance at the meeting — David Schauble.

“It is a noble idea to want to provide for disabled veterans, but we also many young families in Homer struggling to make ends meet,” he said. “The tax burden is already shifting more and more to fewer and fewer people. Let’s not make this growing problem worse.”

Schauble said he would be in support of a hardship provision that all people would be eligible for so that those truly struggling to pay property taxes could have that burden somewhat lifted.

Council members said at the meeting that they were having a hard time justifying letting more property taxes go in light of the financially hard times the city is facing — a trickle down effect of the same financial situation facing the borough and state.

“It’s really difficult for me, even with the current (sales tax cap) proposition on the ballot, for us to be making any good will offers as far as taxation cuts for anyone when we’re trying to balance the books,” said Council member Heath Smith. “… I have the utmost respect for anyone that served this country, and an unfortunate event that they have fallen victim to an injury that has disabled them, is a tragedy. But it’s pretty difficult for me to support something especially right now that doesn’t take into reality where we’re at budget wise. I know it’s a relatively small number, but small numbers add up.”

Stroozas argued that the ordinance represented a small amount of money that would be lost to the city, and that safeguards were written into the borough code, which the Homer code would mimic, to prevent people from taking advantage of the exemption.

For example, the widow or widower of a disabled veteran who had died would only be eligible for the full exemption if that veteran had also been eligible for it when they died. Therefore, the widow or widower of a disabled veteran couldn’t move to Homer from another state and claim the exemption.

Other actions taken at the meeting include:

The council pulled memorandum 17-122 from the consent agenda, and then postponed voting on it until their next meeting. The memorandum requests approval to submit a letter to the Marijuana Control Board to oppose onsite smoking of cannabis but allowing other forms of consumption, including vaping. The council members wanted to hold off on sending the letter until more information can be gathered on the effects of vaping and marijuana where first responders coming into contact with it is concerned. The letter comes at the recommendation of the Cannabis Advisory Commission.

The council approved resolution 17-079, which adopts the 2018-20233 Capital Improvement Plan and establishing legislative priorities for capital projects for fiscal year 2019. To see a draft plan of how the city prioritized projects this year, visit the city website at cityofhomer-ak.gov/economicdevelopment.

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