January 22nd, 2014

Think About It…….                                                                                    January 22, 2014

Our Kenai Peninsula Borough Government is growing and getting very expensive. Ten years ago the Borough Government had a total income from Property and Sales Taxes, Investment earnings and other small grants of just over $70 million dollars. In 2012, the last complete year available, total revenue had jumped to over $108 million dollars.

The Borough Government has spent more revenue than it has taken in for seven of the past ten years.  The worst deficit spending by Borough Government was in 2005 when it over-spent by over $13 million dollars. That legacy of gross over-spending was left by Mayor John Williams after deficit budgets inherited from Mayor Dale Bagley.

However, over the past three years, 2010 through 2012, we have had severe deficit spending of more than $25 million by the Borough.  That’s $25 million dollars in the hole for our Borough government and more deficit spending is expected for 2013 when the accounting rolls in.

Where are all these taxpayer dollars going?  Well, education eats up over 40% at over $51 million a year, Borough Government takes over $17.5 million dollars while Public Safety and maintenance of Roads and Trails at over $25 million take up most of the rest. Hopefully, someone will grab the reins, make some cuts somewhere and stop the financial bleeding in our Borough Government.

The only three years without deficit spending by the Borough over the last ten years were 2007 through 2009.  However, the most important thing our Mayor and Assembly could do, besides bringing deficit spending to a halt, would be to increase the General Fund mil rate to a full 8 mils and at the same time give all private homes and small businesses a significant increase in the exemption on their real property.

You see, State Government, right now, taxes oil and gas industrial properties a full 20 mils while our Borough wide property tax is set at only 4.5 mils.  However, with the Borough allowed to set their mil rate at a maximum of 8 mils but not now doing it, that means that the loss of tax revenue is substantial.  It all flows to State Government coffers instead.

If our Kenai Peninsula Borough was smart we would increase our property tax rate to a full        8 mils to recapture that revenue and then grant a major increase in the real property tax exemption for all private homes and local businesses. That action would allow the Borough to claim its rightful share of property taxes already being paid to the state and give huge tax relief to Borough taxpayers, especially if our Borough leaders would reduce spending and stop all of their deficit spending each year.

Think About It!    John Davis    01-22-14

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