By Jake Dye

Special to the Homer Independent Press

The Kenai Peninsula Borough’s budget for next year looks much like this year’s — the borough-wide mill rate will remain flat, and the borough will both take in and spend about the same amount of money that it did last year.  

“We have just enough employees, we take in just enough taxes to pay the bills,” Borough Mayor Peter Micciche told the borough’s finance committee Tuesday. “We owe that to our constituents and our taxpayers that are kind of struggling right now, for a lot of reasons.”

The borough assembly that evening unanimously enacted an ordinance approving the borough’s budget for the coming year and a separate resolution setting the mill rates.

The borough is projected to bring in roughly $182 million in revenue next fiscal year. Around half of that total comes from property taxes, a quarter comes from sales tax, and the remaining money comes from fees, federal and state awards and interest earnings.

The borough will spend about $193 million next year, with around $75 million of that total — nearly 40% — directed to education.

The assembly this year and last year voted to increase education funding above the amount originally proposed by the borough mayor. Micciche has repeatedly championed his own funding philosophy of allowing spending increases of only 2.5% increases year-over-year to account for inflation. 

Schools have repeatedly gone above that goal, Micciche said Tuesday, but that trend won’t be allowed to continue.

“We’re constraining the rest of the borough’s budget at two and a half percent and very, very generously going over that trend for only education,” he said. “That’s okay. I understood this year what, specifically, they needed for critical programs, but we have to get back to two and a half percent by next year, and we’ve made that clear.”

Per the budget document from borough administration, capital investments in solid waste and hospitals motivate some increases in those departments above Micciche’s budget goal. Public safety, too, is seeing an outsized increase this year to account for a new collective bargaining agreement. 

No amendments were offered on the budget on Tuesday, and the bulk of the discussion was focused on the borough’s projected maintenance spending. Cindy Ecklund, who represents the eastern peninsula on the assembly, questioned how that total wouldn’t necessarily be declining, given that the borough’s school district has closed four schools and many of the district’s pools are expected to close at the end of the month. 

Scott Griebel, who represents Kalifornsky on the assembly, said the district’s maintenance department deserves and needs the funding despite any changes to their actual scope of work.

“Historically, that department has been under-resourced for the workload and building load that they serve,” he said. “Just because we close a few facilities doesn’t mean that changes; it just brings them more on par with what they’re equipped to do.”

The resolution setting mill rates saw more discussion on Tuesday. While borough-wide property taxes will remain flat next year, there are some small reductions in the mill rate for North Peninsula Recreation Service Area, Nikiski Senior Service Area and the Road Service Area, as well as an increase in the mill rate for Seldovia Recreation Service Area as part of the ongoing effort to preserve the pool at Susan B. English School.

Ecklund, for the second year in a row, introduced an amendment to reduce property taxes in the Bear Creek Fire and Emergency Service Area, saying that the current rate is inflated by a 2007 vote to increase taxes to pay for a new fire station — because property values have risen so rapidly in the years since, she said, the mill rate is higher than necessary.

Micciche pushed back on Ecklund’s amendment during the finance committee meeting on Tuesday, saying that the service area’s budget is crafted by a locally elected advisory board and that the service area has too little money, not too much.

“Cutting mill rates is my specialty, and cutting costs when it’s possible,” he said. “I don’t think it’s possible in this case.”

The motion was felled during the evening meeting by a 2-7 vote, with only assembly members Ecklund and Willy Dunne in support. Dale Eicher, a former volunteer firefighter who represents Sterling and Funny River on the assembly, said that the amendment would reduce funding to the service area without any changes to the service area’s approved budget — something would need to be cut.

“Every dollar in this budget exists for a reason, and it was unanimously approved by the board,” Eicher said. “If this department was wasting money, it might be a different story, but I don’t believe there’s anybody tighter with taxpayer dollars in the borough than Chief (Richard) Brackin.”

Beyond that effort, the resolution was approved 8-1, with Ecklund opposed.