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Homer asks voters to approve partial fiscal solution

Image Courtesy of the City of Homer
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City of Homer

Homer residents will be making plenty of decisions when they head to the ballot box next Tuesday. Besides voting for a new borough mayor and city council candidates, voters will also have some important fiscal questions to answer. For Homer voters it’s Proposition 1, and the city administration says it’s big step towards filling a looming $1.2 million budget gap.

Like every community around Alaska, Homer is dealing with a sluggish economy, declining revenue from the state and the resulting fiscal strain on the budget.

The city is staring down a $1.2 million budget gap that is will need to resolve in 2019. It’s not an issue right now because voters approved diverting funds from the Homer Accelerated Roads and Trails program, or HART, for three years in 2015.

The program is currently designed to improve roads and trails as well as pay for new projects, and it’s funded through a .75 percent sales tax.

This is where Proposition 1 comes in. It asks voters to add road and trail maintenance to that list.

“So, Prop. 1 is not a new tax. It’s not sweeping cuts to city services,” Jenny Carrol explained, communications coordinator for the city. “In that way, I feel like Prop. 1 is one of the best solutions at this point that we have.”

She said by allowing HART to fund road and trail maintenance, like snow plowing and repairing heavily used trails, it frees up other money that typically pays for those services.

“Typically our road and trail maintenance is paid out of the general fund. So, what this would do is support the intent of the HART, which is to have a good road and trail system that’s maintained, and it frees up some of the general fund to go towards some of those other essential services,” Carrol said.

If voters approve Proposition 1, the Homer City Council will still need to decide how much money is spent on new road and trail projects and how much will go towards maintaining them. Currently, HART is carrying a balance of about $5.2 million.

The city administration expects that using HART funds for maintenance would alleviate about half of the budget gap.

Carroll explains the remaining deficit will likely be resolved from a mixture of cost-saving measures such as renegotiating contracts, putting less money into reserves and budget cuts. She does note that everything depends on how current and potential revenue streams perform.

“We hope that the city sales tax revenues from our summer tourism industry stays strong. There’s a possibility of the borough’s tax cap proposition passing. That would bring additional revenues to the city,” Carroll added. “Essentially, we would be looking at what cost-saving measures the can city do, what other revenue streams may be coming along and work from there.”

Compared to last year, Homer pulled in about $700,000 more in tax revenue between April and June. Numbers from July and August, peak tourism season for Homer, will be posted later this fall.  

If voters pass borough Proposition 3, the borough’s tax-cap proposal, Homer city code would automatically bring the city’s cap in line with the borough. That could mean an additional $350,000 for Homer and whittle the budget gap down to a quarter of a million dollars.

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News Ballot PropositionsMunicipal Election 2017
Aaron Bolton has moved on to a new position in Montana; he is no longer KBBI News Director. KBBI is currently seeking a News Director, and Kathleen Gustafson is filling in for the time being.
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