The Kenai Peninsula Borough Assembly passed the 2021 budget at their June 2 meeting. The budget was closely aligned with the Mayor Charlie Pierce’s proposal.
The budget will fund the borough’s annual fiscal year, running from July 1 until June 30, 2021. The assembly will appropriate $82,884,710 to the borough’s general fund, which is $60,000 more than Pierce sought to appropriate in his proposed budget.
The budget funds each of the borough’s departments and assigns contributions to the Kenai Peninsula Borough School District.
The borough’s total budget includes $71,162,283 in revenues for the general fund, which is made up of $38,708,906 in property tax revenue, $27,431,594 in sales tax revenue, $705,000 in state revenue, $3,740,000 in federal revenue and $576,783 in “other revenues and financing sources.” Expenditures for FY 2021 are expected to exceed those revenues by $11,629,299. Compared to the FY 2020 budget, overall expenditures were reduced by $2,705,717.
The budget includes $50 million for the school district, which is about $2 million less than the district received last year. The borough will also be contributing $849,848 to the Kenai Peninsula College, a $2,662 increase from the 2020 budget.
The proposed budget increases funding for the borough’s solid waste program, due to the department’s ongoing maintenance and contractual obligations and storm water requirements, the document said. The solid waste department includes administration, landfills, hauling and waste programs and transfer sites. The assembly funded the department at $8,877,757, a $28,433 increase from the 2020 budget.
Service area budgets are comparable to their FY 2020 budgets.
The budget includes some funds to address maintenance and capital facility needs, including $1.25 million to the school facilities project fund to address school buildings.
The borough’s budget will take a hit next year due to the global pandemic.
The borough is estimating sales tax revenues to be nearly $5 million less than what the department originally budgeted, which was around $27 million. The $4.8 million projected loss of sales tax revenue is a 15% decrease from fiscal year 2020.
A budget presentation included with the proposed budget document shows how other parts of the local economy will be impacted by the COVID-19 pandemic. The presentation says borough residents can expect to see decreasing assessed values, higher delinquency rates for property and sales taxes, high unemployment, low interest rates, low oil prices and higher mill rates or reduced services.
In the proposed budget document, the borough finance department is also projecting a $4.5 million decrease in property taxes, which is anticipated to reduce property tax collections and lower oil and gas property values. Since 2015, oil and gas assessed property has increased 31%, the document said.
Gov. Mike Dunleavy’s most recent vetoes of the community assistance funding and school bond debt reimbursement have been noted as “significant factors in the development” of the proposed budget, the document said. The community assistance veto is a reduction of $830,672 the borough was anticipating. Dunleavy’s veto of the state aid for school construction also reduces $2.6 million from the borough, which is to be made up for by fund balance. Total state revenues are expected to decrease by $330,672, or 32% from FY 2020.
The budget takes effect July 1.
• By Victoria Petersen, For the Peninsula Clarion