Kenai council takes up $75,000 home tax exemption for November ballot

Kenai homeowners could keep $75,000 of a home's assessed value off their city property tax bill under a measure the Kenai City Council takes up Wednesday, Aug. 19. The ordinance would send the question to city voters at the Nov. 3 regular election.

Mayor Henry Knackstedt and council member Sovala Kisena sponsor the measure, which would create the exemption in a new section of city code. It sits on the consent agenda, the list of items approved in one motion unless a member asks to pull it for separate discussion.

The council set the city property tax rate at 4.35 mills in the budget it adopted in June, or $435 in annual taxes for each $100,000 of taxable value. At that rate, the ordinance estimates the exemption would apply to 1,435 property owners, cost the city $442,202 a year and save any one owner at most $326.25.

Kenai resident James Basin told the council Aug. 5 that rising assessments were outrunning household budgets. "What I fear is that specifically our seniors, whether you're looking at our disabled veterans and just your young homeowners, the price of this, of the tax that we're going to see on an annual basis increase, they're not going to be able to afford," Basin said.

State law permits a municipality to exempt residential property by voter-ratified ordinance, capped at $75,000 per residence unless adjusted for inflation. Separately, state law mandates a $150,000 assessed-value exemption on the primary residences of qualifying seniors, disabled veterans and certain widows or widowers.

The Kenai Peninsula Borough already exempts up to $75,000 of assessed value for residents who own and occupy their homes, and the city's would be bolted to it — only residents who apply for and receive the borough exemption would get Kenai's. If approved, it takes effect Jan. 1, 2027, for fiscal year 2028.

The Alaska Municipal League notes in its guidance that all property is taxable unless exempted, and that exemptions narrow the base municipalities rely on to fund services.

A 4 pm work session on residential exemptions, led by City Manager Terry Eubank, precedes the 6 pm council meeting; residents can weigh in at either.