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Borough budget approved with flat mill, sales tax rates

Kenai Peninsula Borough Mayor Peter Micciche speaks during a borough assembly meeting on June 4, 2024.
Ashlyn O'Hara
Kenai Peninsula Borough Mayor Peter Micciche speaks during a borough assembly meeting on June 4, 2024.

The Kenai Peninsula Borough has settled on a spending plan for the upcoming fiscal year following assembly approval of the borough budget Tuesday.

The budget includes status quo sales and property tax rates and near-full funding for the Kenai Peninsula Borough School District. The borough has a three percent sales tax and property tax rate of 4.3 mills. Across all its funds, the borough expects to bring in roughly $178 million and to spend about $180 million.

Most of the money the borough expects to take in — 75% — will come from property and sales tax. The borough expects property tax revenues to go up next fiscal year, while sales tax revenues level out.

Brandi Harbaugh is the Kenai Peninsula Borough’s finance director. She told the borough assembly last month that sales tax revenue will likely go down during the first half of the next fiscal year and then be flat for the second half.

Not every business type is experiencing the same trend, though — sales tax revenue from commercial rentals is predicted to go down, while the borough foresees the same revenue from residential rentals going up.

“So we have a lot of odd dynamics and so we don’t want to necessarily not pay attention to some of these indicators, but there’s no positive indicators that our sales tax are going to increase over the second half and so we’re going to keep it flat for the projection of the budget,” Harbaugh said.

All of the money the borough gets from sales tax goes to the Kenai Peninsula Borough School District. It’s the borough’s largest annual expense. The borough will put $65.2 million toward the district for the next fiscal year. That includes $56.2 million for the district’s general operating expenses.

Fifty-six million dollars is less than the school district asked for, but is more than the borough gave last year. Neither the borough nor the school district know how much money KPBSD will be getting from the State of Alaska this budget cycle.

State lawmakers included one-time funding on top of the state’s base contribution in the state budget currently being considered by Gov. Mike Dunleavy. That extra money would boost KPBSD’s budget by $11.4 million. Dunleavy indicated he won’t veto that amount during a press conference last month.

The approved budget is nearly identical to the version proposed by Borough Mayor Peter Micciche earlier this year. The assembly made minor amendments to the document, including increasing the amount of money the borough needs for software licensing and correcting the amount of money in the Solid Waste Department’s capital project fund.

Micciche has touted the budget as one that prioritizes sustainability while maintaining the level of borough services expected by residents. One of his stated goals this budget cycle was to either decrease borough spending, or to ensure any increase in spending is equal to or less than Anchorage’s consumer price index.

“People are — work really hard,” Micciche said. “And the fact that they and you have understood the value, the sustainability of CPI-based budgeting over time, it's really hard work. And some of that's not obvious to all of you. But we do without. We prioritize. We, instead of directors trying to get whatever they can, we're working together as a team by prioritizing as a borough and distributing accordingly. And it's really working.”

The fiscal year covered by the budget passed Tuesday starts on July 1 and will end on June 30, 2025.

Prior to joining KDLL's news team in May 2024, O'Hara spent nearly four years reporting for the Peninsula Clarion in Kenai. Before that, she was a freelance reporter for The New York Times, a statehouse reporter for the Columbia Missourian and a graduate of the University of Missouri School of Journalism. You can reach her at