Voters to decide on tobacco tax and senior sales tax exemption

The Petersburg Borough Assembly will present five changes to the borough’s sales tax code to voters on October’s ballot.

In July, the assembly will begin drafting the elements of the changes, which include requiring PFD filings for proof of residency for senior sales tax exemption eligibility, limiting the exemption to food and heating fuel and the establishment of a sunset date for the eventual elimination of the exemption.

Changes also include an increase in the sales tax cap and implementing a tobacco excise tax.

Assembly Member Jeigh Stanton Gregor said he has different opinions on each of these issues but that the question is best put to the voters.

“This is going to be a community decision and one that shouldn’t, in the long, run be up to us,” Stanton Gregor said. “I’m going to support it here so the public gets to make its decision. These are great questions to ask the community and a public ballot’s the way to do it.”

Sales Tax Ordinance Committee members made the recommendations and the Borough Assembly will now fine tune each exemption for the ballot measure.

The committee suggested the sales tax cap, currently capped at $1,200, be increased to $1,500 or $1,700—meaning that if a buyer purchases goods in the borough that exceed that amount, they are exempt from paying sales tax after they’ve reached the cap amount.

Assembly member John Havrilek said he would like to see the cap raised to $2,000.

The question of eliminating the senior exemption by establishing a date when residents are no longer eligible to apply for it was the only issue the assembly didn’t unanimously approve.

Members Bob Lynn and Cindi Lagoudakis both agreed that limiting it to food and fuel was enough.

“I can tell you there are a lot of people who are in need around here who don’t have a lot of money,” Lynn said. “I couldn’t even begin to vote yes for this one.”

Mayor Mark Jensen voted to continue with the elimination so the voters could decide.

“I may not agree with it but I agree with, like Jeigh, to get it in front of the public and let everybody make the decisions,” Jensen said.

Borough Manager Steve Giesbrecht said eliminating the senior exemption isn’t a money grab by the borough.

“Our demographics are showing that more and more people are falling into this senior tax exemption,” Giesbrecht said to the assembly. “While it’s not a problem today, if those demographics continue 20 years from now whoever is sitting in your chairs then are going to have a much bigger problem. What we’re recommending to the assembly and the community as a whole is let’s try to solve this problem today.”

Seniors collectively saved around $267,000 in exemptions in 2012 compared to $180,000 five years ago—a 48 percent increase while overall sales, before exemptions, increased by 17 percent.

The assembly also agreed a tobacco excise should be in effect and discussed $1 and $2 per pack taxes on cigarettes and additional tax on other tobacco products as well.

The assembly will begin ironing out the details of each exemption in July and draft an ordinance that will ultimately be approved by the citizens of Petersburg.