Pierce supports Dunleavy budget proposal

Feb 13, 2019


The governor's proposal to send property taxes on oil and gas infrastructure to the state instead of municipalities could cost the Kenai Peninsula Borough $15 million in revenue.
Credit ConocoPhillips

As promised, nearly every section of the state budget is in the crosshairs of Governor Mike Dunleavy’s proposed budget released Wednesday. One major change that doesn’t directly involve a cut in funding deals with property taxes on oil and gas infrastructure.

The governor has proposed taking away the power of municipalities to levy that tax. Instead, the revenue would go to the state. Kenai Peninsula Borough Mayor Charlie Pierce says that could mean a loss of around $15 million for the borough.

“That’s a significant one here on the Peninsula. There’s a number of service areas that get their general fund operating budgets are derived and generated from this tax. If the state were to shift that, remove our ability to tax, then we would have to find other ways to make up those differences.”

Pierce says he’s told borough department heads to put some things on hold while the legislature and administration debate the final details. The proposed cuts could shift a lot of costs to local governments.

“Many of us in governing agencies, municipalities, boroughs, we have taxing powers already enacted whereas the state does not. This is an example of we’ll keep these revenues to help us make money here at the state and balance our books and then we’ll push some of the expenditures off to the local level and give them the option to tax.”

Pierce says he still intends to deliver a balanced borough budget, regardless of what’s happening at the state level, and that overall, he supports Dunleavy’s proposal.

“I like it from the sense that I think it’s responsible in Alaska to get our revenues and our expenditures in line with each other. I come from that line of thinking and I understand why he’s trying to do it. I think that there will be a lot of Alaskans who have lived here for many, many years and have benefitted from receiving services that have been supported by state income. I think in light of our current situation, it’s inevitable.”