Kenai voters will decide whether to create a new citywide tax exemption when they head to the voting booth later this year. Kenai City Council members unanimously voted Wednesday to put the issue on the city ballot.
If approved, the proposal would exempt the first $75,000 of their residential property’s taxable value from the city’s property tax. The maximum possible savings for an eligible property owner would be $326.25.
Kenai Mayor Henry Knackstedt says the exemption would distinguish Kenai from other municipalities on the Kenai Peninsula.
“Particularly the younger families, you know, where every dollar does count. If they want to buy a house, it's very difficult now,” he said. “It is an incentive to come to Kenai.”
The city estimates almost $100 million worth of residential property could become exempt from city taxes if the proposition passes. At the city’s current property tax rate, the exemption would cost Kenai around $430,000 that would otherwise go into its general government fund.
The exemption was proposed to the council by a former member, who said it would offset the impacts of the growing property tax burden on Kenai homeowners. Multiple people told the council Wednesday that’s something they’re also concerned about.
John Ulen lives in Kenai and says he supports the exemption.
“I think it's a good benefit for the youngsters that we can draw to our city to keep living here,” he said.
Wednesday’s vote came two weeks after the council convened for a work session to talk through the details of the proposal. That’s when city officials said that Kenai could afford the exemption, but asked whether it should take on the expense. To offset the hit, the city floated reducing spending on city projects, or drawing from savings.
Council member Phil Daniel expressed concerns about rushing to get the question on the ballot given its long-term implications for the city.
“It was just a fast timeline, and we usually have more time to debate these things, and so I'm a little concerned we haven't given enough due diligence to try to like, you know, go through everything,” he said.
That’s something council member Bridget Grieme is also worried about.
“I think it's really easy to look at the positives and say, yeah, this is relief, and I would like that relief too, and I would like that relief for my two young adult children who live in this community,” she said. “But I want to make sure it's a responsible decision that remains responsible moving forward.”
Ultimately, the council unanimously voted to put the proposal before voters, with some saying time is running out to get it on the ballot this year.
Election Day is Nov. 3.
