Snowmelt and sunshine typically herald the arrival of spring – but for the Kenai Peninsula’s public employees, it’s also budget season. The fiscal year ends in June, so for the borough, cities and schools, hashing out a spending plan is a top priority.
Speaking to the Kenai and Soldotna chambers of commerce Wednesday, Borough Mayor Peter Micciche talked through a few key elements of his yet-to-be-released borough budget.
And to lay the groundwork, he started with some perspective.
“There are 10 entire states that are smaller than our Kenai Peninsula Borough,” he said. “We're West Virginia-size – very large area. That makes it difficult to be efficient.”
Those difficulties are particularly palpable when it comes to education.
The borough spends the biggest chunk of its budget on the Kenai Peninsula Borough School District, which boasts more than 40 traditional, charter, fly-in and small schools. It’s expensive to duplicate services across such a large area. And this year, the district is looking to the borough to help make up a significant financial shortfall.
“That’s their battle cry – ‘fund to the cap,’” he said. “They're $21 million in the hole, but they want us to fund to the cap, which brings them to $17 million in the hole.”
“Funding to the cap,” refers to the maximum amount of money the borough can give this year. And Micciche’s already said he won’t be giving the school district all the money it’s asking for. The difference is roughly equal to the value of a new initiative he’s proposing.
Micciche wants to give property tax relief to borough residents next fiscal year, by lowering what’s called the “mill rate.” It’s a rate that gets multiplied by a property’s taxable value to determine how much the property owner pays.
And for the first time in more than three decades, Micciche wants to drop that rate below four mills [WEB: from 4.3 mills to 3.85 mills]. If the assembly signs off on that request, it will be the second time he’s lowered property taxes since taking office in 2023. He says that’s a lot to do with his personal philosophy on municipal finances.
“I don't think government's job is to hold on to money,” he said. “We're not a bank. That's not what we do.”
His efforts come amid spikes in the assessed value of borough property. That’s resulted in more money owed to the borough by property owners. Earlier this week, borough assembly members killed an initiative brought by Micciche and aimed at softening those spikes. It would have called for state lawmakers to let local governments cap the percent increase of assessing values.
“We send out our assessing bill, and you start calling us, and sometimes you say bad things about our mothers and things like that, because you don't understand that we simply, under state law, don't have another option,” he said.
Even though his resolution failed, Micciche says he’s not giving up trying to rally lawmakers around the cause.
Overall, Micciche says he wants to tie borough spending to inflation, which is up two-and-half percent from last year. His budget proposal in its current iteration actually spends a quarter-percent less than last year’s budget. He says that strategy is as much about predictability than anything else.
“If we can instill that value for the long term, while I'm here, you'll know what your budget needs are 20 years from now,” he said. “It is a sustainable budget.”
Beyond the budget, Micciche teased a smattering of initiatives he wants to advance in the future. A land affordability program, for instance, through which peninsula residents would get a 25% discount on borough land as long as they develop it in a certain number of years.
He’s organizing a statewide solid waste coalition to try and make trash collection more efficient, wrapping up the borough’s tourism working group and monitoring developments in the Alaska LNG Project.
Borough assembly members have until the end of May to adopt a spending plan. Before then, they’ll be able to review, amend the ultimately pass a version of Micciche’s proposal.
