Sales tax increase back on assembly agenda

The public will have a chance to weigh in Tuesday on a proposition to ask voters whether the Kenai Peninsula Borough should raise the sales tax.

The assembly is considering an ordinance that would ask voters to approve a sales tax increase from 3 percent to 3.5 percent borough-wide. A $100 purchase would increase from $103 to $103.50 on purchases in the borough outside city limits, with the amounts in the cities varying based on the individual local government’s sales taxes.

The increase, proposed by assembly member Kelly Cooper, would go into effect April 1, 2019 and would raise an estimated $1.4 million in the remaining three months of fiscal year 2019 and $5 million each year after that, according to a fiscal note attached to the ordinance for the assembly’s Tuesday meeting.

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

The sales tax increase is the most recent attempt to bridge the borough’s $4 million budget gap and preserve the fund balance. Cooper wrote in her memo to the assembly she proposed the sales tax increase as an alternative to the bed tax proposal, which was defeated at the assembly’s March 6 meeting.

“The shortfall cannot be solved by cuts alone,” she wrote. “The borough needs to look to both create new revenue sources and to broaden the impact of taxes levied so that a small proportion of the population is not overburdened by the impact of local government taxes.”

Borough Mayor Charlie Pierce’s administration has proposed an amendment to move the effective date to Jan. 1, 2019 to align with the city of Soldotna’s new 4.5 percent tax on cannabis, allowing the borough to modify its sales tax software at the same time to save time and expense, he wrote in a memo to the assembly. Assembly member Norm Blakeley has also proposed an amendment that would set a sunset date on the tax increase after four years, requiring voter approval in 2022 to extend it beyond that year.

“Although the economy is currently in decline, in four years it may rebound, eliminating the need for additional sales tax revenues generated by the 0.5 percent increase this ordinance would authorize,” he wrote in his memo to the assembly.

The borough’s sales tax has been set at 3 percent since fiscal year 2008, when it increased from 2 percent. It was previously reduced from 3 percent in fiscal year 1976, according to a sales tax rate history attached to the ordinance. Sales taxes in the borough are dedicated to support the Kenai Peninsula Borough School District.

The assembly will hear the ordinance at its meeting on Feb. 3 in at the assembly chambers in Soldotna.

Reach Elizabeth Earl at eearl@peninsulaclarion.com.

More in News

Vice President Kelly Cooper speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, July 8, 2025. (Jake Dye/Peninsula Clarion)
Borough considers seasonal sales tax rate

Borough sales tax would be modified from a flat 3% to a seasonal model of 4% in summer months and 2% in winter months.

The Kasilof River is seen from the Kasilof River Recreation Area, July 30, 2019, in Kasilof, Alaska. (Photo by Erin Thompson/Peninsula Clarion)
King salmon fishing on Kasilof closes Thursday

If any king salmon is caught while fishing for other species, they may not be removed from the water and must be released immediately.

Un’a, a female sea otter pup who was admitted to the Alaska SeaLife Center in June 2025, plays with an enrichment toy at the center in Seward, Alaska. Photo courtesy of the Alaska SeaLife Center
SeaLife Center admits 2 seal pups, 1 orphaned otter

The three pups join the Alaska SeaLife Center’s ‘growing’ patient list.

James Wardlow demonstrates flilleting a salmon with an ulu during a smoked salmon demonstration, part of Fish Week 2023, on Wednesday, July 19, 2023, at the Kenai National Wildlife Refuge Visitor Center in Soldotna, Alaska. (Jake Dye/Peninsula Clarion)
Refuge to celebrate all things fish during weeklong event

Fish Week will take place July 16-19.

President Zen Kelly speaks during a meeting of the Kenai Peninsula Borough School District Board of Education in Soldotna, Alaska, on Monday, July 7, 2025. (Jake Dye/Peninsula Clarion)
School board finalizes budget with deep cuts to programming, classrooms

Multiple members of the board said they were frustrated by the state’s failure to fund education.

Former KPBSD Finance Director Liz Hayes speaks during a Kenai Peninsula Borough School District budget development meeting at Kenai Central High School in Kenai, Alaska, on Wednesday, Feb. 19, 2025. (Jake Dye/Peninsula Clarion)
School district finance department earns national awards

The two awards are based on comprehensive reviews of the district’s budget and financial reporting.

Children leap forward to grab candy during a Fourth of July parade on South Willow Street in Kenai, Alaska, on July 4, 2025. (Photo courtesy Sarah Every)
Celebrating the 4th in the streets

Kenai comes out for annual Independence Day parade.

Fire crews respond to the Bruce Fire, July 4, 2025, in Soldotna, Alaska. (Alaska Division of Forestry)
Firefighting crews respond to wildfire outside Soldotna

The 8-acre fire and two “spot fires” of less than one acre each are located near Mile 102 and 103 of the Sterling Highway.

Most Read

You're browsing in private mode.
Please sign in or subscribe to continue reading articles in this mode.

Peninsula Clarion relies on subscription revenue to provide local content for our readers.

Subscribe

Already a subscriber? Please sign in