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Home My WebLink About09282016 City Council Work Session Laydown - KPB Sales Tax Proposition • w oJk- s Why the changes in tax codes Ensure tax responsibility is shared fairly between Oa, E t 4 aot propositio a. sales and property taxes, and all property owners Reliance on property taxes has been growing, r - 0 -4a1 3eE a 1 t z and is projected to widen its lead over sales taxes �,�t ,,� � � �i �EoZl$ Borough's Fiscal Year 201 8 general tax levy \gtgf 11-k 411,30i,2 is projected to increase from 4.5 mills to 5mills The borough and cities need to deal with '- g , continuing state cuts to schools and revenue sharing Updates also add efficiencies for public/borough Kenai Peninsula Borough Mayor Mike Navarre Seward City Council presentation,Sept.26,2016 Increase in taxable limit on sales Tax limit unchanged since 1965 Under existing code, the borough sales tax The $500 limit has not been changed since borough is charged on the first $500 of each transaction voters adopted the first sales tax ordinance in 1965 The proposition approved by the borough assembly If adjusted for inflation, $500 in 1965 would have for Oct. 4 ballot, if approved by voters, would raise the same buying power as more than $3,000 today taxable transaction limit to $1,000 on Jan. 1, 2017 Many Alaska municipalities have a sales tax limit If it passes, borough code would be amended to Many caps are at $1,000 or higher; some are lower exempt residential rents from sales tax Jan. 1, 2017 Home-rule cities Seward and Kenai determine their Net borough gain from higher taxable limit and own sales tax cap; other cities ruled by borough cap rent exemption estimated $2.9 million in Fiscal 2018 ) Examples of Alaska sales tax caps Estimated change in tax revenues North Pole $200 J Sitka $3,000 Kenai Borough: Plus $3.6 million from $1,000 cap, Wasilla $500 J Bethel $10,000 minus $700,000 from residential rent exemption Haines Borough $10,000 City of Kodiak $750 Soldotna: Plus $235,000, minus $120,000 Juneau $12,000 Palmer $1,000 Kenai: Plus $423,000, minus $157,000 Kotzebue No limit; Ketchikan Borough $1,000 $1,000 limit on boats,cars, Homer: Plus $358,000, minus $231,000 trucks,ATVs,snowmachines Petersburg $1,200Nome No limit; Seward: Plus $203,000, minus $77,000 Dillingham $2,000 $1,500 limit on cars,trucks, Seldovia: Plus $5,600 and minus $1,000 g ATVs and snowmachines Cordova $3,000 Senior property tax exemption Phased-in reduction Senior citizens exempt from borough property taxes Ordinance structured to protect current recipients on $300,000 in assessed value, plus $50,000 of exemption and new applicants through 2017 residential exemption allowed for all homeowners Proposal would not reduce anyone's current benefit State requires $150,000 senior exemption Reduced optional exemption would start in 2018, Additional $150,000 optional under state law; but only for seniors who don't reach 65 before then borough adopted, but not any cities in the borough Senior tax exemption benefit would be reduced North Slope only other $150,000 option in state in three steps, with final change coming in 2024 Growing senior population shifts tax load to others Intent is to give pre-65 residents time to prepare Senior population % gain Proposed phase-in schedule so% Senior citizen population growth rate projected Senior citizens total property tax exemption by owner's birthday at 10 times higher than borough growth rote 2000-2030 300% > got o„or �� ) ) before Jan.1,7953— lan.7,1956— Jon.t,1959 Dec 31,1952 Dec.3I,1955 Dec 31,1958 and Iorer MoDemme..of Ipbp...pom,.In oval 2021 a prol.nbn,out l0 2030 250% j Torah$350,000 Total $300,000 T0101:$250,000 Total:$200,000 700% Borough population 30%gain 2000-2030 Addir,oml exernprpn 0150,000 pddilionol.x.mplion 160x° Senior citizen population 300%gain 2000-2030 ' $100.000 Add,O000°,en,pl,on fsc,000 l00% i ;£ Mond0rory vaemplion Mand°lary 000n.gan Mandolo,0 esen.p°n Mandolory e0emprion 30% 1111 £S $150,000 0150 000 $150,000 $150,000 0% 0.•doni ol e..TP ° r,ion 2.+ n o e.. 0.,0.nr'a mp ea• n Per d.rn 0 2000 2001 2002 2001 2001 2005 200.2007 200$2009 2010 2012 2015 2020 2025 1030 000000550.000n,p S50.000 150 OW How we compare statewide Voting information If phase-out is adopted,where the borough would stand in Polls will be open 7 a.m. - 8 p.m. Tuesday, Oct. 4. property tax exemption for newly eligible seniors in 2024 A list of polling places is available at: $350,000 aplion.l $300,000mann fax .a.pi00 $250,000 $200,000 State- mandated lot►mandated Absentee ballots are available online at: $150,00 tamer Ma $100,000 $30,000 {J ,04,d Ip ell mode/Mai $0 popMy• For information on the propositions, contact Larry Persily in the mayor's office,714-2158 (Ipersily U@kpb.us) � �e D l0 4 e s 4. •AnrA.reg..,M p.,rb.nk,.a...pt 10%and 20%,r..V.atirNY,of r..,*nriol prop.1y value°p 10$10,000