This week the Kenai Peninsula Borough Assembly took its first look at the budget for next year. The real discussion will go on during public hearings in the coming weeks, but here are some basics.
At a bit more than $138 million dollars, the proposed budget for fiscal year 2018, represents approximately 3 percent growth over last year’s budget. As with every year, education takes the biggest piece of the pie, at roughly $54 million. Public safety is the second biggest spending area at $19 million, down a tick from last year.
The past few years have seen strong growth in oil and gas. Lots of smaller, independent producers have found opportunities from Anchor Point to Kenai and, of course, out in Cook Inlet. For the next budget cycle, it amounts to more than a billion dollars in assessed value.
But Borough Finance Director Craig Chapman says that growth is slowing down.
"It’s a $660 million increase from FY13, but from FY17, it’s only a $7 million increase. You’ll see that throughout the budget document, that revenues have kind of flattened out for the year."
And, of course, lower oil prices mean less revenue from the state. Revenue sharing might fall to basically zero by 2019. Chapman says that pushes more responsibilities on cities and boroughs.
"For FY17, the state did not fully fund debt service. The impact to the borough is a tenth of a mill. All of these little things add up and then the state pushing things down to the local communities. Also, the state’s lack of a long-term plan (leading to) downgrading by Wall Street will impact everybody in the state just because of the cost of borrowing money and the ability of the state to get money."
Two public hearings are scheduled before the Assembly casts a final vote on the budget, one on May 16th and the second on June 6th.
Correction: The original version of this story misidentified borough Finance Director Craig Chapman. KDLL regrets the error.