Ordinance 06-05, to amend the sales tax code to provide an exemption for senior citizens’ heating fuel, was finally passed on 2006 July 25. The vote was 4 to 2 and 1 abstention. For, Hugh Dyment, Tundy Rogers, Andy McGowen, Mary Kenick. Against, Thor Williams, Dan Leinberger. Abstain, citing conflict of interest, David Trantham.
The ordinance was originally submitted in February 2006 by Councilor Trantham and again by Councilor Rogers. Hearings occurred at the March 28, April 11, April 25, June 13, and July 25 council meetings. The delay in action was a result of examining the costs of modifying the exemption (by the finance committee) and the request by several councilors to have the ordinance re-written. The ordinance was not re-written and was finally voted upon.
The finance department estimated that perhaps 85 people would take advantage of the exemption. A limited ad hoc survey found elders can be paying $350 to $600 per month for 75 to 100 gallons (coldest months). The City might lose $14,700 in annual tax; seniors might save $173 per year.
It should be noted —
- as the finance department notes, there are no data on who might use the exemption and how many gallons of fuel oil (diesel) would be involved
- 75 to 100 gallons a month seems like a lot of fuel. The amount depends primarily on the quality of housing and heating. For older people who are enrolled tribal members, their tribe or tribal housing consortium has a trust responsibility to ensure adequate housing
The finance committee recommended unanimously against the ordinance because it might result in requests for special treatment or exemptions from other groups and individuals. Churches were used as a specific example. Therefore, correcting the fuel oversight would result in a drain on City finances.
Councilor Dyment promised to create an ordinance for the next council meeting, which would cut $24,000 from other City services because of the senior exemption.
It should also be noted —
- the ordinance corrects an oversight in the existing municipal code which grants a recognition to older Bethel people, because they are older, and is not means tested
- some, but not all, churches currently have a city government subsidy (reduced garbage fees).
- sales tax income is not guaranteed income for budgeting purposes
- as the price of fuel goes up, the number of gallons sold tends to decrease. Why cut $24,000?
- this is not the first time that the elderly have been blamed for City deficits
Exemptions and subsidies do subtract from potential City income. As you can see below, elders’ exemptions are only R, S, and T of the alphabet list. There was no data presented as to the financial hit of senior exemptions out of the total exempted sales tax income. If the issue were one merely of tax income and city spending, then perhaps all exemptions should be revoked, not just the ones for older people.
Certainly, the illegal exemptions should be revoked first.
[ORDINANCE #04-28, AN ORDINANCE AMENDING SECTION 13.16.010 OF THE BETHEL MUNICIPAL CODE TO REMOVE CHURCHES FROM A MONTHLY FLAT RATE OF $45.00 TO A RESIDENTIAL SERVICE RATE WITH A FLAT RATE OF $12.00. Introduced by: City Manager Herron Date: November 30, 2004
Public Hearing: January 11, 2004, Action: Adopted
Vote: 4-2 (Rodgers, Dyment)
ENACTED THIS 11th DAY OF JANUARY, 2005 by a vote of 4 in favor and 2 opposed. Hugh Dyment, Mayor]
Initially, the Finance Director said eight churches would qualify; then eleven. But there are 16 announced places of worship in the newspaper. And there are other organizations with Federal tax exemptions as churches.
The Supreme Court has held that “[t]he First Amendment mandates governmental neutrality between religion and religion, and between religion and nonreligion.” Epperson v. Arkansas, 393 U.S. 97, 104 (1968).
This principle of neutrality “is part of our settled jurisprudence” and “prohibits government from abandoning secular purposes in order to put an imprimatur on one religion, or on religion as such, or to favor the adherents of any sect or religious organization. ” Texas Monthly, Inc. v. Bullock, 489 U.S. 1, 8-9 (1989) (plurality opinion) (quoting Gillette, 401 U.S. at 450). According to the text of the ordinance, the purpose for allowing churches to receive the same rates as residences for solid waste collection is that “churches are not like an ordinary business for profit” and “churches receive gifts and donations (not revenue), so Chapter 13.16.010 of the Code should charge churches with the lowest charge for solid waste services so as to treat churches fairly.”
Although government may provide a benefit to religious organizations without violating the Establishment Clause, the government must either provide this benefit to both religious and non-religious organizations that meet the same neutral criteria or the benefit must lift a substantial burden on the exercise of religion. Here, it is extremely unlikely that the commercial charge of $45 for solid waste collection places a substantial burden on the exercise of religion.
Thus, the ordinance can only be justified if it is extended to non-religious organizations as well. While it is true that residential dwellings receive the lower rate, if the city is going to extend the lower rate to churches, it should also extend the same rate to nonprofit organizations because the same rationale that was put forward for allowing churches to pay the lower rate (they do not have any revenue) would also apply to nonprofit organizations. Now, it may be the case that Bethel has no nonprofit organizations, which is why they were not included in the ordinance.
The Supreme Court has also held that providing a government benefit to one religious denomination while denying it to another constitutes an unconstitutional preference for one religion over others. See Bd. of Educ. v. Grumet, 512 U.S. 687, 706-07 (1994) (“whatever the limits of permissible legislative accommodations may be, it is clear that neutrality as among religions must be honored”).
Fuel oil sales tax was overlooked in the city codes which provide —
4.16.040 Exemptions.
R. The sale to a senior citizen of food intended for consumption by the senior citizen, his or her spouse living in the same household, or the unemancipated minor children of either the senior citizen or his or her spouse, who live in the same household. The senior citizen shall display at the time of the sale a current and valid senior citizen exemption certificate issued to the person under Section 4.16.050C of this chapter. For purposes of this subsection, “food” is defined in accordance with 7 U.S.C. 2012(g) (definition of “food” for purposes of the Food Stamp Act);
S. The payment of rent by a senior citizen on a single dwelling occupied as the senior citizen’s primary residence and permanent place of abode. The senior citizen shall provide proof at the time of payment of a current and valid senior citizen exemption certificate issued to the person under Section 4.16.050C of this chapter;
T. Payment for telephone, electric, water sewer utility services by a senior citizen on a single dwelling occupied as the senior citizen’s primary residence and permanent place of abode. The senior citizen shall provide proof at the time of payment of a current and valid senior citizen exemption certificate issued to the person under Section 4.16.050C of this chapter;
There is an additional credit —
13.16.070 Senior citizen credit.
A. Any Bethel citizen at least sixty years of age residing in their own household shall receive up to a twenty-five-dollar monthly utility credit, if they are the primary source of income, after making application for such at the city utilities office.
B. All other Bethel citizens at least sixty years of age that do not meet the conditions of subsection A of this section shall receive up to a ten-dollar monthly utility credit after making application for such to the city utilities office.
C. Each residential unit shall be limited to one credit application. (Modification 2 of Ord. 85, 1980: prior code § 11.16.080)
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