The Soldotna City Council got an early look at the beginning of the fiscal year 2021 budget at its meeting Wednesday. City administration wanted to give the council a heads up on what they might see in terms of financial repercussions of the COVID-19 pandemic.

Sales tax is a huge chunk of Soldotna’s revenue. City Manager Stephanie Queen says the city anticipates the biggest hit being in March and the current quarter, with things slowly recovering over the next fiscal year.

“We are anticipating a reduction of sales tax revenue in the current fiscal year of about $800,000, essentially about 10 percent of the year in total reduction. And then, for FY21, the budget we’re building, we’re anticipating essentially double that, so, a 21 percent reduction, which is equivalent to $1.7 million reduction,” Queen said.

Borough agrees to $45 million floor for school district

Apr 22, 2020

 With the school year winding down, the Kenai Peninsula Borough is working on how to fund the next one. With the economy in suspension due to the coronavirus pandemic and oil prices in the basement, the future is unclear.

And not just for the borough. The Kenai Peninsula Borough School District relies on the borough for part of its funding. The first step in determining the borough’s contribution is ensuring a minimum amount of money it will contribute to the district, with the option for the assembly to raise the final amount from there. At its Tuesday meeting, the assembly unanimously passed a resolution to set the floor at $45 million for next year.

With businesses shut down or slowed down due to the COVID-19 pandemic, that doesn’t just hurt employees and owners, it hurts the local governments that rely on sales tax revenue generated from those businesses.

In the Kenai Peninsula Borough, that also hurts the school district, as sales taxes are the pot of money that’s used to fund schools. The Kenai Peninsula Borough Assembly and KPBSD Board of Education held a joint work session Monday afternoon to discuss the numbers.  

Borough Finance Director Brandi Harbaugh painted a bleak picture.

"We estimate between 15 and 30 percent reduction in sales tax revenues over the next year and that coincides to a fairly large number for the borough. We’re looking at approximately $5 million loss at the end of this fiscal year, which we did not budget for. And then an additional $6 million to $7 million in next fiscal year. So, we anticipate a 15 percent reduction next year and then it slowly recovers over the next 24 months and it actually relates to a little over $11 million sales tax loss,” Harbaugh said.

The city of Kenai is preparing its fiscal year 2021 budget with several areas of economic strength but still will likely need to implement a tax increase or user fees to make up for the loss in state support for capital projects.

Kenai Mayor Brian Gabriel and City Manager Paul Ostrander gave a presentation on the city’s budget last week.

There were several bright spots. Sales tax revenue continues an upward trend. The city’s 3 percent tax rate generates about $244 million, with sales tax revenue making up 54 percent of the city budget. That number should increase even more next year when online sales are taxed, as well.

Property tax is about 29 percent of the city’s budget, with a 4.35 mill rate. But money from the state has declined precipitously in recent years. Shared revenue, mostly in the form of fish taxes, is holding steady, while community revenue sharing funds have been considerably reduced and are likely to drop another $100,000 this year.

Ostrander says the biggest hit is in capital projects.

Jenny Neyman/KDLL

As complex as the state budget is on the micro level, at the macro level, there are only three elements in play.

“We cut the budget in a significant way to keep a bigger PDF, we somehow find new revenues, which, I’ll be the first to tell you, I don’t think is on the table in a big way this session. Or we either overdraw from the earnings of the permanent fund or we take our one last savings account, which we have shown you is down to a very sort of perilous $2 billion mark. And those are basically our choices. They’re all difficult choices,” said Speaker of the House Bryce Edgmon, of Dillingham, at a town hall meeting Saturday in Soldotna.

Wiki Commons

A race for the school board in Sterling and Funny River is one of the most contested in the upcoming municipal election. Four people are vying for that one seat.

The Kenai Peninsula Borough School District Board of Education looked out at a sea of red in its meeting in Homer on Monday night. Over a hundred teachers and support staff, who are seeing red over unresolved contract negotiations, wore red to the meeting and spoke out about their concerns.

Negotiations for a contract that was supposed to go into effect this school year began in February but have yet to be resolved. The school district and associations representing teachers and support staff went through an unsuccessful round of mediation and now are moving to arbitration. Dave Brighton, president of the Kenai Peninsula Education Association, says it’s been about a decade since a round of negotiations finished on time and without needing outside adjudication.

“I don’t know why it is that every time we go to the negotiations table we end up going all the way through mediation and then arbitration,” Brighton said. “I can’t remember a contract that we’ve had that didn’t go through that. I’m asking you guys to encourage the school district to come to the negotiation table to bargain.”

Kenai City budget sets money aside for improvements

Jun 11, 2018

The Kenai City Council last week set its budget for the new fiscal year, which begins on July 1. The budget appropriates $16,166,027 from the General Fund as part of a $28,105,942 total budget. Appropriations from the Enterprise and Internal Service Funds amount to just over $3 million, while the city’s Special Revenue Funds contribute about $8.75 million.

The council also committed $750,000 of unassigned General Fund money for future renovation and improvements to city facilities and streets. The employee salary schedule was also amended.

The Kenai Peninsula Borough School District is eying a $1.3 million to $2 million budget deficit next school year. Much of that will be covered by the district’s reserve account. But the rest, depending on how state and borough funding shake out, could mean cuts in the classroom.


The school district is getting a jump on budgeting for next year, and it’s starting out on a low note.

The Kenai Peninsula Borough School District is bracing for the loss of about 100 students from its projected enrollment this year. That will mean more than empty seats on the bus or fewer sandwiches in the lunch line. Since most state funding is allocated per student, that means less money than the district expected for next year’s budget.


Though this school year is only a couple of months old, the Kenai Peninsula Borough School District is getting a jump on planning next year’s budget, and wants the community to help.

The district is holding community budget meetings at 22 schools at 5:30 p.m. tonight. Superintendent Sean Dusek will give an overview of the budget via teleconference, then each site will go into more detail about that school’s budget.

Kenai Conversation: Representative Gary Knopp

Jul 26, 2017

This week, Shaylon Cochran sits down with Rep. Gary Knopp (R-Soldotna) to talk about ongoing state budget issues, the economic future of the state and how things could work more smoothly in Juneau.