In its budget for the next fiscal year, the Kenai Peninsula Borough administration says it's prioritizing school funding and aiming to balance the budget after years of spending increases without proportional increases in revenue.
The proposed budget, presented last Tuesday, is now up for consideration by the borough assembly. It applies to the period from July 1 of this year through June 2024, and represents a spending increase of just 2.55% over this year — or about $4.3 million.
In an introductory letter, Borough Mayor Peter Micciche and Finance Director Brandi Harbaugh write that the borough budget has been increasing at a rate that will eventually become unaffordable for residents. They say this year’s proposed budget is designed to, “correct that condition for current and future borough taxpayers by returning to a sustainable trend.”
In a press release, Micciche described the proposal as a return to a “balanced budget philosophy” for the boroughwide budget for the first time in six years.
Assembly Finance Chair Brent Hibbert said Tuesday he feels good about the position the borough is in with the budget.
“As we all know, the price of goods, wages, healthcare and everything has gone up. The budget has increased but we’re still in a very good position because sales taxes have increased, property taxes have increased, and so the borough is in good hands,” he said.
Micciche and Harbaugh explain in their letter that because of inflation in the cost of goods and fuel, the borough’s sales tax revenue this year is up almost $8 million from the expected amount.
One hundred percent of sales tax revenue goes toward the education budget. The Kenai Peninsula Borough School District makes up the largest component of the borough’s budget, and it is allowed to provide money within a range, set by the state, based on assessed property values. The rest of the district's budget comes from the state.
This year, the borough plans to provide the full amount of funding possible to the school district to begin with, about $54.8 million.
In the past, the borough’s contribution to the district has been a debated topic. School Board president Debbie Cary thanked the assembly for the outright support Tuesday night.
“Thank you for fully funding to the cap this year, and for your support of education, and the investment of what education does for our students, and recognizing how important it is,” she said.
Another big-budget item is solid waste, which represents 11.5% of the total expenditures, and accounts for much of the increase in this year’s budget. Maintenance, contracts, fuel and supplies are the biggest upward pressures on that number.
The draft budget had its first introduction at the assembly meeting Tuesday night, although there were no comments from the public. The budget is up for public hearing at the next borough meeting on May 16th, and again on June 6th.
