Preliminary results show Prop 1, 2 pass, Prop 3, 4 fail

Kenai Peninsula voters shot down two tax proposals but supported two bond issuances for new projects in Tuesday’s elections.

Voters in the Kenai Peninsula Borough decided on the future of four ballot propositions Tuesday. Proposition 1 approves the issuance of more than $10 million in bonds to fund the construction of future cells at Central Peninsula Landfill outside Soldotna, which serves the majority of the borough’s population. Proposition 2, decided by voters in the South Kenai Peninsula Hospital Service Area, approves $4.8 million in bonds to fund new facilities at South Peninsula Hospital and the Homer Medical Center. Both passed — a little more than 53 percent of voters supported Proposition 1, and about 57 percent of voters supported Proposition 2, according to the unofficial results.

The other two ballot propositions generated controversy throughout their discussion. Proposition 3 would have raised the maximum amount of a purchase subject to sales tax from $500 to $1,000, but exempted residential rentals from sales tax. Proposition 4 would have gradually eliminated the borough’s optional senior property tax exemption, reducing the total exemption available to peninsula seniors to $200,000 by 2024. Current recipients would not have lost their exemptions.

Proposition 3 failed, with 57.53 percent of voters opposing it. Proposition 4 failed dramatically, with 71.68 percent of voters against it, according to the unofficial results.

Both propositions arose from a comprehensive review of the sales and property tax code from Borough Mayor Mike Navarre’s administration over the last year. The borough assembly reviewed both proposals after discussion, but both needed voter approval before going into effect.

Navarre proposed the increase in the sales tax cap because the amount had not increased since 1965, when it was set at $500 per individual transaction. The change, which would have gone into effect on Jan. 1, 2017, would raise approximately $2.9 million in additional revenue for the borough. Because of concerns for the effect on renters, who would have to pay more in sales tax every month, Navarre proposed exempting residential rentals.

Many of the voters said they saw the merit in raising the tax cap, though others disagreed with raising taxes. Christopher White of Soldotna said he disagreed with the rental property exemption.

“I didn’t like the byproduct of that sales tax thing, which was like people wouldn’t be taxed on their rental dwellings even though they live there, so I voted … no on that,” he said.

Diana Spann of Soldotna voted yes on Proposition 3 because she said it was time to raise the sales tax.

“… I think that we need to share the burden of the benefits that we reap while we live here,” Spann said.

The question of whether the eliminate the borough’s portion of the property tax exemption raised controversy throughout the discussion because of the potential effect on seniors. The state requires that municipalities maintain at least $150,000 in property tax exemption for seniors and disabled veterans, and the borough offers a $50,000 residential property tax exemption for a total of $200,000. The portion that would be phased out is an additional $150,000 the borough opted into.

Navarre said he proposed the reduction because as the peninsula’s population ages — the Alaska Department of Labor and Workforce Development projects that approximately 23 percent of the peninsula’s residents will be age 65 or older by 2030 — and more property value becomes eligible for exemptions, the tax burden will shift toward the younger population, which will comprise less of the total.

“The senior population is growing at 10 times the rate of the regular population,” Navarre said at a June 21 borough assembly meeting. “If we get to a point where we have 50 percent seniors and 50 percent non-seniors, should the non-seniors pay twice as much in order to pay for the services for the seniors?”

Voters had mixed reactions to it. Gary Hinkel of Kalifornsky Beach Road said he would have been more willing to support it had he been voting to revoke current seniors’ exemptions, not the exemptions for those in the future.

“It feels like a cheap shot,” Hinkel said. “If they need it now, take it now.”

Margo Reilly of Kenai said she voted against the reduction in the senior property tax exemption because many seniors have fixed incomes.

“I’m disappointed to be voting on the senior tax exemption,” Reilly said. “I think they’ve earned that.”

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.

More in News

Peninsula Clarion file
Merry voices to fill Kenai chamber

Historical society carolling event returns after hiatus

COVID-19. (Image courtesy CDC)
State officials urge vaccination as omicron spreads in US

Omicron was first identified as a “variant of concern” by the World Health Organization on Nov. 26.

Alaska State Troopers logo.
1 hunter dead, another missing after boat hits rough seas off Whittier

The pair were reportedly hunting on Wednesday on Esther Island in Prince William Sound.

Kenai City Council members James Baisden (left) and Deborah Sounart (right) listen as member Teea Winger (center) speaks in support of legislation opposing government COVID-19 mandates, during a meeting of the Kenai City Council on Wednesday, in Kenai.
Kenai council declares opposition to mask mandates

The statement does not change city code or supersede federal law.

Signage indicates that face masks are required for entry to the Soldotna Public Library on March 25, 2021 in Soldotna, Alaska. The Soldotna City Council voted Wednesday to make mask-wearing optional in city facilities. (Ashlyn O’Hara/Peninsula Clarion)
Masks recommended, not required in Soldotna city buildings

Council amends measure to make mask-wearing optional

Nick Begich III, seen here in this undated photo, is challenging Rep. Don Young, R-Alaska, for his seat in the U.S. House of Representatives saying Alaska needs new energy in Washington D.C. (Courtesy photo / Alaskans for Nick Begich)
Nick Begich III touts fiscal conservatism in US House race

GOP candidate challenges Young’s record

Sockeye salmon. (Photo via Alaska Department of Fish and Game)
Fish and Game seeks comment on 2022 sport fish stocking plan

The Sport Fish Division plans to release approximately 7 million fish into the Alaska water systems over the next five years.

A map shows which parts of the Chugach National Forest are open to motorized winter recreation use for the 2021-2022 season. (Map courtesy of the U.S. Forest Service)
Parts of Chugach National Forest open to snowmachine use

The 2021-2022 winter motorized season will run through April 30.

Kenai Police Department Chief David Ross explains the purpose of a grant to be used for new radios during a meeting of the Kenai City Council on Wednesday, Dec. 1, 2021 in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Kenai Police to update radios using grant money

The department received almost $260,000 through the U.S. Department of Homeland Security.

Most Read