Kenai Peninsula Borough Assembly members Tuesday unanimously approved an almost $200 million spending plan for the fiscal year that starts next month. The borough budget designates money for local schools, road work, borough landfills, service areas and government operations, among other things.
The 400-plus-page document is almost entirely unchanged from the version introduced by Borough Mayor Peter Micciche in April. He says it’s one that demonstrates fiscal conservatism and long-term sustainability.
“I’m proud of this budget,” he said. “It's higher than I'd like because of the education one-timer, but I did feel like it was necessary this year for recognizing some hard work by the district and the fact that they're moving in the right direction.”
Micciche has been a vocal proponent of tying year-over-year department spending to a 2.5% adjustment for inflation. This year, he deviated from that philosophy for the Kenai Peninsula Borough School District. The district is getting the same amount of money it got from the borough last year, but it’s around $3.3 million more than what Micciche proposed last year adjusted for inflation.
Some assembly members, like south peninsula representative Willy Dunne, wanted to give the district more money. But he says the final budget is a good compromise.
“I would have loved to have provided a higher local contribution for our school district, but I'm glad we were able to come in at the $62.4 million level for local contribution to schools, rather than some of the lower numbers that were discussed,” he said.
Across all funds, the borough expects to spend just over $190 million. Of that, the largest chunk – almost 40% – will go to education. Another 18% will go to public safety and 13% will go to general government operations. And 13% will go to solid waste and roads.
The budget predicts the borough will rake in a little over $100 million to its catchall general fund. Almost all of that – 91.45% – will come from sales tax and property tax. The borough expects a slight bump in sales tax revenue and in property tax revenue, although assembly members approved a flat boroughwide mill rate, or property tax rate, of 3.85 mills.
Property tax rates are changing in some parts of the borough. Seldovia’s recreation service area, for example, is increasing its rate by three-quarters of a mill. The community plans to use the additional money to help operate the community pool, which school board members closed earlier this year due to budget cuts.
Property tax rates are decreasing by 0.15 mills in the North Peninsula Recreation Service Area, by 0.01 mills in the Nikiski Senior Service Area and by 0.10 mills in the Road Service Area. The net impact of the four adjustments is expected to contribute to a roughly $1.5 million bump to borough income, as the taxable value of borough property is also expected to increase by about 2.7%.
Cindy Ecklund, who represents the eastern peninsula, tried and failed to lower the property tax rate for the borough’s Bear Creek Fire Service Area. The change was requested by a majority vote of members of the newly-formed Bear Creek Community Council, but faced opposition from some service area residents who feared a concurrent reduction in service.
The upcoming fiscal year covers the 12-month period that starts July 1.
