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.