Kenai Peninsula Borough Mayor Peter Micciche speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, April 2, 2024. (Jake Dye/Peninsula Clarion)

Kenai Peninsula Borough Mayor Peter Micciche speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, April 2, 2024. (Jake Dye/Peninsula Clarion)

Borough mayor proposes flat sales tax, mill rates in $180 million draft budget

Borough Mayor Peter Micciche emphasized sustainability and affordability

Sustainability and affordability are the themes of Mayor Peter Micciche’s Kenai Peninsula Borough budget proposal for the fiscal year that starts July 1. The draft document was presented on Tuesday to members of the borough assembly, who get final approval of the budget.

The draft budget proposes flat property and sales tax rates and funding for the borough that Micciche says is sustainable. Assembly members will solicit public feedback on the proposed spending plan at its upcoming meetings on May 21 and June 4 before a final vote.

The borough’s mill rate is 4.3 mills. The amount of money someone pays in property tax in a fiscal year is calculated by dividing the mill rate by 1,000 and then multiplying that number by the assessed property value.

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Across all fund types, the borough expects to bring in about $178 million next fiscal year, roughly half of which is expected to come from property taxes. Another quarter will come from sales tax revenue, while the rest will come from fees, federal and state awards and interest earnings.

The borough expects to spend just over $180 million across all funds. More than a third — over $66 million — will be spent on the Kenai Peninsula Borough School District, either through monetary or in-kind contributions. Borough assembly members on Tuesday established the minimum amount of money the borough will spend on education next fiscal year.

The borough is projected to bring in nearly $100 million in revenue to its catchall general fund, of which about half will come from property tax revenue. Another 45% will come from sales tax revenue, all of which goes to pay for the school district.

Spending on solid waste services, which accounts for 11% of all general fund spending, is expected to increase next fiscal year. That increase is attributed to the impact of inflation on existing borough contracts. Almost $1 million of work on capital projects at the Central Peninsula Landfill is also planned and.

The borough is planning to hire one full-time employee who will help manage the borough’s grant and bond projects and whose position will be mostly grant funded. That’s in addition to one new part-time employee for the borough’s solid waste fund and one new part-time employee for the school maintenance fund. Borough fire service areas will also add four staff positions.

The budget funds roughly $3.9 million worth of major maintenance at KPBSD facilities, which are owned and maintained by the borough. Planned work will address HVAC systems, boiler upgrades intended to reduce utility costs, safety improvements, windows, and siding, among others.

The budget also funds roughly $3.6 million worth of major maintenance at KPBSD facilities, which are owned and maintained by the borough. Planned work will address HVAC systems, boiler upgrades intended to reduce utility costs, safety improvements, windows, and siding, among others.

In an introductory budget letter addressed to assembly members and borough residents, Micciche said his goal is to ensure boroughwide spending either goes down or only increases by an amount equal to or less than Anchorage’s consumer price index.

“Unsustainable budgets result in eventually unaffordable mill and tax rates for our borough residents,” he wrote. “This budget is attempting to maintain the correction of that condition for current and future borough taxpayers by returning to a sustainable trend.”

The Kenai Peninsula Borough’s draft budget documents can be found on the borough’s website at kpb.us.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.

CORRECTION: This story has been updated to clarify the types of staff positions the borough would add under Micciche’s budget proposal and to correct the amount of money the borough will spend on school maintenance.

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