Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

As Haines’ population continues to age, an increasing number of homes in town qualify for the state-mandated exemption from property taxes.

About 17% of the total assessed value of residential property in Haines is owned by seniors or disabled veterans and exempt from taxes, according to borough data.

The tax-exempt status will cost the borough $414,389 in lost revenue this year. The borough expects to collect almost $3.4 million in property taxes this year on taxable residential and commercial property.

The assessed value of all privately-owned residential property in the community this year is close to $253 million, with about $42 million exempt from taxes because it’s owned by disabled veterans or senior citizens, defined in state law as age 65 and older or a surviving widow or widower age 60 and older.

State law since 1972 requires municipalities to exempt from property taxes the first $150,000 in assessed value on a senior-owned home, though some municipalities have gone beyond the minimum exemption.

Seniors in Haines pay the full tax rate on any value in excess of $150,000.

The Alaska Legislature stopped reimbursing cities and boroughs for the mandatory tax exemption almost 25 years ago, even though the statute says the state shall cover the cost. The Legislature and governors started phasing out the reimbursement during budget deficits in 1986 before completely stopping the payments to cities and boroughs in 1997.

The unfunded tax exemption will cost cities and boroughs across the state about $100 million this year.

In 2018 Haines Borough officials began asking senior residents, on the exemption form, to consider donating to the borough the amount of tax they would owe without an exemption.

Haines property taxes are due in the fall. Assessments are based on property values as of Jan. 1 each year.

Haines had the fourth highest percentage of tax-exempt residential property owned by seniors or disabled veterans of all municipalities in the state, according to the Department of Commerce 2021 Alaska Taxable report, issued in January. Wrangell topped the list; seniors there own about 25% of assessed value of residential property. Nenana and Petersburg also had higher percentages than Haines.

The number of homes owned by seniors or disabled veterans on Haines’ tax-exempt list is 302 this year. It has climbed from 278 last year, 267 in 2020 and 250 homes in 2016 as Haines’ population ages. The community has around 1,000 households, according to census data.

The state Department of Labor Research and Analysis Division estimates the median age of residents in Haines at 47.4 years old in July 2021, based on 2020 census data, an increase from 46.9 years old after the 2010 census. Almost one quarter of the population is over 65, according to the Census Bureau.

The statewide median age as of July 2021 was 36 years old, according to Labor Department numbers.

Haines is not alone in its aging population and shrinking tax roll. The median age in Wrangell was 47.1 years old last year, according to the state, up from 46.4 years old in 2010.

Chilkat Valley News writer Max Graham contributed to this report.

*The original version of this story stated that the borough chief fiscal officer said for the first time a senior resident last year donated the full property tax amount. The CVN later learned that another senior resident had paid full property taxes before the borough started suggesting donations.