The Kenai Peninsula Borough Assembly rebuked a key component of Governor Mike Dunleavy’s proposed budget last night. A pair of bills Dunleavy has sent to the legislature would shift tax revenue from oil and gas properties from municipalities to the state. That would mean a roughly $15 million deduction in borough revenue, nearly 20 percent of what the borough brings in.
Assembly member Dale Bagley and Mayor Charlie Pierce introduced a resolution at Tuesday night’s meeting that would support modifying those bills to allow municipalities to tax oil and gas properties at 15 mills, which is allowed under state statute.
Kenai city council member Tim Navarre, speaking on his own behalf, told the Assembly that service areas could take a big hit without a change and that it would create unfunded mandates for cities and boroughs.
“Why shouldn’t the oil companies pay their fair share if you’re going to ask all the other residents for two more mills in the service area to help offset the loss... If we were taxing our residents 17 mills, we should get the 17 mills from oil and gas properties that are in our community, just like you taxing my house. The state, in the past, the senior exemption, they used to pay that. Then they made it an unfunded mandate to the municipalities. They’re not paying that, but it’s our bill. Now they want to take our oil and gas properties and say that doesn’t count.”
The resolution passed unanimously.