1. If elected, what issues do you feel require immediate attention?
Grayling Bassett: The borough needs new landfills.
It is reasonable for the borough to explore how to continue its stances on issues of trash separation, methane recuperation from landfill fields, and charging businesses, possibly extend that to residential.
There may be a place for private-public partnerships on recyclables and compost-able materials.
Environmental issues must be evaluated.
Erosion is already threatening public infrastructure, and the borough is going to have to consider when it participates in shoring-up or relocating infrastructure as the existing parameters change.
The borough will have to get involved as each community adapts, potentially opening up previously undeveloped areas to utilization.
If feasible, I would also be interested in a test program of allowing residents to commit a portion of their tax burden to areas of borough spending which they would individually prioritize, giving taxpayers a more direct say in the bundle of public goods and services they consume.
Blaine Gilman: The most pressing issues relate to the socioeconomic impacts of the proposed Alaska LNG Project. Nikiski has been chosen as the lead site for the LNG Plant. The workforce for the construction of the LNG Plant is projected to be 3,500 – 5,000 people with up to 600 permanent jobs.
The Municipal Advisory Gas Project Review Board (in which the Borough Mayor is a member) met on September 11, 2014 in Anchorage to discuss property taxes on these proposed facilities. Its consultants recommended a Payment In Lieu Of Taxes. The mayor as well as the assembly needs to make sure we have a funding mechanism in place that will pay for the socioeconomic impacts to the borough.
A committee needs to be formed comprised of members from Soldotna, Kenai and Nikiski to share their concerns about impacts and advise the mayor for future meetings with the Review Board.
Jake Thompson: The anadromous stream ordinance should be repealed. Like most people, I am all for habitat protection, but I’m also a firm believer in private property rights. Like most things in government, they take a good idea, or a good intention, and take it way too far. I believe we can protect the habitat without what amounts to a land grab by the borough. So ultimately I’d like to see the ordinance in it’s current form be repealed, and then replaced by something more respectful to property owners.
My next concern is the budget. I found a quote in the FY15 adopted budget that alarmed me, “Expenditures exceed projected revenues by $2,021,869”. A budget that plans for expenditures to exceed revenue is FISCAL INSANITY!
2. Has the borough struck the proper balance between sales tax and property tax? Are there inequities within the borough’s tax structure that should be addressed?
Bassett: On whole, I think the property/sales tax balance is not bad, but needs to be assessed and tweaked when it’s becoming sub-optimal.
Generally available information show that the city of Kenai and the borough have a relatively low sales taxes rate. (taxwatch.com, forbes.com)
For similar cities/boroughs within the state, we in the KPB pay a comparably lower mill rate on our property taxes. (money.cnn.com, brookings.edu, taxfoundation.org)
Property tax exemptions help many people to continue living in the borough, compensating for the higher cost of living we have in Alaska.
The sales tax limit at $500 may need re-evaluation, aiming to be revenue neutral in regards to borough income, and should be reflected in a decrease in the mill rate.
Any major change in the tax structure should be made clear as to who is getting what tax relief, and at the cost of whom.
Gilman: Overall, the borough has struck the proper balance between sales tax and property tax. The sales tax ordinances should be reviewed periodically to make sure that they are being administered fairly with businesses and whether current exemptions make sense.
Thompson: Fundamentally, I’m opposed to property tax. The concept of having to continually pay for something you already own, under threat of it being taken away from you, just feels wrong. So any reduction in property tax is good thing, in my opinion. I’m not opposed to sales tax, however we do have to strike a balance to keep people shopping locally and not heading north to Anchorage to avoid sales tax. I do think we should strongly consider looking into the borough tax structure. Recently the borough attempted to pass a bed tax, thankfully Mayor Navarre used his veto authority. I believe we should be trimming our budgets before developing new taxes.
3. What role should the assembly play in addressing local healthcare issues?
Bassett: To my understanding, the borough is the capital owner of CPGH, and jointly with city of Homer of SPH.
The assembly makes decisions about purchases of capital in the forms of real estate and equipment.
As such, a thorough discussion needs to occur between the assembly and the service boards, potentially with the input of local healthcare providers and other related interest groups, as to which services should be made available by public investment in publicly owned healthcare infrastructure.
It may be an enticing idea that borough owned resources could be a local option to many out of borough/state alternatives, justifying a continued expansion of services offered, but we also need to evaluate if we have the population make-up for such services to be reasonably available.
The assembly is simply part of that process.
It can be only as determinant as its members’ individual operating philosophies or constituents’ collective responsiveness.
Gilman: The borough is in the healthcare business whether we like it or not. The question is whether it should remain so.
Central Peninsula Hospital is owned by the borough and operated by CPGH, Inc., a non-profit corporation, under a Lease and Operating Agreement. This Agreement expires on December 31, 2017. The borough is required to give a Notice of Termination on or before December 31, 2016. If Notice of Termination is not given, the term of the Lease and Operating Agreement automatic renews for an additional 10 year period.
The assembly needs to decide whether to continue operating the hospital under this arrangement or whether it should be sold. My concern is whether CPGH, Inc. is competing too strongly against physicians and other medical providers in the private sector. Government should not be competing against private businesses unless services are not being provided by the private sector.
Thompson: The assembly should be encouraging more private competition. There has been one mechanism that throughout history has continuously lowered cost while increasing quality, and that is competition and the free market. For instance, a surgery center just opened in Kenai, many of their procedures are significantly less expensive than that of CPGH. Private industry and competition is driving down the cost of healthcare here on the peninsula already! Unfortunately the hospital’s Inc board is denying the surgery center in Kenai a “transfer agreement” that would allow the surgery center to accept Medicaid, Medicare, and Tri-Star patients. I find it unacceptable for a borough owned hospital to not allow patients a choice, and to stifle private enterprise. As Kenai’s representative to the Borough, I will encourage private enterprise and remove obstacles that discourages lower costs, patient choice, and the free market.
4. Funding for education is the largest item in the borough budget. What is your philosophy on funding for the school district?
Bassett: In general, the school district operates under the watchful eye of not only their own accounting, but the school board, local parents, the state, and are subject to 3rd party accounting review.
As a result, I would like to think that the requests that they put forward are reasonable, and should be granted what they ask for within the proscribed limits, as it is the responsibility of the borough to educate our children and young citizens.
I believe that there are those who hold unfavorable positions toward certain curricula for personal reasons, wanting to withhold funding to have those curricula points removed.
This consequently leads them to undermine (not necessarily maliciously) what is in the public interest of producing well informed, work-ready citizens.
This unfortunately is at cross purposes for our shared desire to maintain and improve the well being of our community.
Gilman: I support funding the school district to the cap.
Funding education is the conservative choice. Our state is spending approximately $35,000 per year to incarcerate an intimate and 57% of intimates have not graduated from high school. It is more fiscally conservative to educate people than to imprison them.
The borough paid 44 million to the school district for fiscal year 2014. Ten million gets paid back to the borough for in-kind services (maintenance, insurance, and audit costs). The source of these funds is from the seasonal sales tax and a 2.2 mill rate. This is a good deal for the taxpayers.
For fiscal year 2014, the borough paid 92.5% of the cap. In other words, the borough could have paid an additional 3.5 million towards schools. The majority of people who I have talked with in the community want schools to be strongly supported and funded to the cap.
Thompson: I attended Sears (when Snoopy was the mascot), Mountain View, Kenai Middle School, and Kenai Central High School. My daughter just started Kindergarten at Mountain View Elementary this year. It’s important that we provide our children a quality education, and that requires adequate funding. However, I don’t believe funding is the sole factor in a quality education. The State of Alaska spends more money per student on education than 46 other states, however our graduation rates are below average, our test scores haven’t shown any significant improvement of the last several years. I want our children to get the education we’re paying for. I want accountability for the money spent, I want an increase in vocational opportunities, and not only do I want, but we need more parental involvement in their children’s education.
5. What experience will you draw on as you examine the borough’s $70 million-plus budget?
Bassett: I don’t have experience being personally accountable for a budget the borough’s size, but there are many parallels between personal and small business income/revenues and expenditures and public spending.
However, the government is not in the business of making money.
Rather the government is responsible for allocating services where there is a collective interest in maintaining a standard which the market can not provide.
Ultimately, money in and money out must be close to balancing, and any deficits or surpluses must be appropriately handled.
In policy school training, I handled exercises examining many areas of public interest: making recommendations for states with severe budgetary shortfalls during the financial crisis; analyzing potential improvements in privatizing government operated services; comparing and preparing cost-benefit studies for potential pubic investments; evaluating the efficacy of public programs through empirical studies.
I will draw on these experiences, and listen to what advice that’s available to me.
Gilman: I served on the Kenai City Council from October 2003 to October 2005. Shortly before my term started, K-Mart had gone bankrupt and had shut down its store. As a result, the City of Kenai was facing a large fiscal gap. We were required to make serious cuts to the budget and find innovated methods to provide city services.
Also, I have operated my own business for over twenty plus years. I have had to keep payroll in line with revenues. Likewise, the borough should make sure its budget balances.
Finally, the assembly should meet with each borough department and have them justify and explain their budget. If there are unnecessary expenditures, I would have no hesitation in requesting the departments to cut their budgets.
Thompson: When my daughter was born in 2009, my wife was had a great career as a Hotel Manager, and I was doing well as the Program Director and Operations Manager for KSRM Radio Group. My wife and I decided it was in our children’s best interest for her to be a stay at home mom. This reduced our income nearly in half. As the sole provider for a wife, and two small children, I understand the importance of a proper budget and separating needs from wants, while making certain the each purchase is made carefully and deliberately. Living within our means is a skillset I will bring to the forefront of the budgetary conversation.
