It looks like Petersburg voters will decide a raft of proposed changes to sales tax exemptions this October. Petersburg’s borough assembly Monday took the first step toward putting five proposed changes on this fall’s local ballot, including a possible sunsetting of the community’s sales tax exemptions for senior citizens.
The proposed sales tax changes still need three assembly approvals in ordinance form before they even appear on the local ballot. Then it’ll be up to voters to decide. Two of the proposed changes would impact a sales tax exemption for seniors. One may mean the eventual phasing out of the allowance while keeping the exemption for people are 65 and older and already qualify.
Kurt Wohlhueter has proposed sunsetting the senior exemption and suggested ending it for people born during or after his birth year, 1955. “I mean I’m not gonna plan where I’m gonna settle seven years from now due to city sales tax exemption or 150-thousand dollar tax cut on my house. Grandchildren are going to be first priority and health will be the second priority. So if you have it out a ways, it gives people a chance to adjust, those that are planning on staying for the rest of their lives.” Wohlhueter wanted to maintain the exemption for people who already qualify but eliminate it for future seniors.
It’s an issue debated by a sales tax committee through the winter, but one that did not see a consensus agreement by that committee. Borough manager Steve Giesbrecht explained the exemption would be a problem for the borough in the future. “The reason this is being talked about is that we’re seeing an increasing number of senior sales tax exemptions. Our demographics are showing that more and more people are falling into this senior tax exemption. And while it’s not a problem today if those demographics continue 20 years from now, whoever’s sitting in your chairs then is going to have a much bigger problem.”
Not all assembly members we’re in favor of ending the exemption. Bob Lynn thought people in the area couldn’t afford the borough’s six percent tax. “Over the last 10 years I’ve probably done 3-4000 hours of work for people both within town and outside, of freebies. And I can tell you there are a lot of people who are in need around here, who don’t have a lot of money. And I couldn’t even begin to vote for this latter one. You know we’ve already taken a step to reduce the other folks.”
Assembly members discussed several ways of sunsetting the senior exemption, while grandfathering in seniors who already have the exemptions. They did not decide on specifics yet but will debate that once a draft ordinance comes back before the assembly.
Lynn and Cindi Lagoudakis voted against advancing that ballot question. However, with five votes in favor, borough staff will draft ordinance language for the assembly review starting in early July.
Assembly members were unanimous in advancing a potential change to the senior exemption which would apply the allowance only to groceries and home heating fuel.
Another unanimous was on a proposed excise tax for tobacco products sold in the borough. Nancy Strand was a supporter of that change. “I think it is a deterrent to increase the cost. I’ve long advocated for a tax on tobacco products and I think that additional tax should go into the general fund to be disbursed as needed from there. I don’t think it should be earmarked for any department.”
The tobacco tax has been one idea for starting to fund maintenance at the Petersburg Medical Center. Earlier in the meeting PMC CEO Liz Woodyard urged the assembly to put that issue on the ballot. “I would encourage the assembly to support a tobacco tax to put it on the ballot for this coming fall and dedicating the proceeds to support the hospital to allow us to purchase needed equipment and for the maintenance and repair of the building which is owned by the borough,” Woodyard said.
Other proposed changes would have the borough checking residency requirements for sales tax exemptions with the state’s permanent fund division. And voters will likely be deciding again on an increase for the sales tax cap. The proposal would increase the cap to 2000 dollars from the current $1,200 cap. Jeigh Stanton Gregor was in favor of putting all the questions to local voters. “I’m definitely going to support this because I think the voters should decide. This is going to be a community decision and one that shouldn’t in the long run be up to us. So I’m going to support it here so that the public gets to make its decision. These are great questions to ask the community and a public ballot is the way to do it.” A similar question for city of Petersburg voters to raise the cap failed in 2012 by only six votes.