Politics

Juneau riles seniors with loss of sales tax exemption

JUNEAU -- Angry Juneau seniors are accusing the city government of targeting them with an unfair tax increase, and some are threatening retaliation.

The threats range from withholding their volunteer labor and donations to nonprofits to retribution at the ballot box -- and even leaving town for places where they say seniors are considered assets to the community.

"The amount of hours we put in and give to this city are phenomenal, and you want to balance your budget on our backs," said retired federal employee Nora Laughlin.

She was speaking to the City and Borough of Juneau Assembly, and what's got Laughlin and other older residents so worked up is the loss of their blanket exemption to the city's 5 percent retail sales tax.

Currently, residents aged 65 and older can get a card from the city that they can flash in stores and avoid the city's sales tax.

But a fear that hard times for the state government will soon mean hard times for local governments has the Assembly looking at city costs, including the growing cost in lost revenue from the exemption as the city's senior population continues to grow.

When 2016 begins the city will only exempt necessities such as food, heating fuel and utilities for seniors, a change city staff said could raise an extra $1 million or more in tax revenue.

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In response, some seniors are saying they'll shift their shopping online to avoid tax, while others say seniors may be forced to move.

"I know for myself personally I'll be looking for a cheaper place to live," said Howard Shepherd.

Seniors moving away will cost the city far more than the revenue raised, he said, because of all the other spending seniors do.

Seniors boost the city's economy, especially with family visits and the spending that those visitors do, the Assembly was told.

"I wonder if the business community is prepared to see that revenue source leave town," Shepherd said.

The Juneau Chamber of Commerce endorsed the sales tax change before the Assembly's 7-2 vote in favor in September.

That's got senior anger with the Assembly spreading to the Chamber of Commerce and businesses as well, said Ron Somerville, who has organized opposition to the loss of the exemption.

"They feel that the business community kind of stabbed them in the back, the chamber was the one supporting this, or pushing this," he said.

Somerville is among those who say there will be consequences from the city's action, including from him.

"Each person has got to assess it as it affects them," said the 78-year-old. "I personally will quit volunteering and probably will significantly reduce my donations to local causes," he said.

The exemption had already faced some criticism from those who had said that many seniors didn't need it as much as did some young families. The city's new sales tax ordinance maintains the exemption for lower-income seniors who will get a rebate of the amount they're likely to pay.

But there was also support for the change, with Mike Clemens saying it was needed because Alaska was driving off a fiscal cliff "like Thelma and Louise."

The city has already been making budget cuts, but more will be coming at the state and city level as the impact continues to spread, he said.

"It's going to get ugly, there's going to be a new normal for Alaska state and local finance," Clemens said.

Seniors said they'd also consider the loss of the sales tax exemption when they vote in local elections. That could be for individual candidates, or in their willingness to support bond measures and sales tax proposals at the polls.

Somerville said some are exploring a referendum on the city ordinance, but didn't know whether it could meet the legal requirements for a referendum. Prior to the adoption of the change numerous seniors had called on the city to put the proposal before the voters.

"We tried to get the assembly to put it out for vote, but they wouldn't do that, probably because they knew it would lose," he said.

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Prior to the vote Juneau Mayor Merrill Sanford tried to calm the seniors who felt singled out.

"This Assembly knows how valuable you seniors are," he said.

Sanford himself will face voters next week as he runs for re-election. He voted against ending the exemption.

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