Mayor Charlie Pierce said the consequences of Gov. Mike Dunleavy’s proposed budget cuts would be grim for the borough. During a Kenai Peninsula Borough Assembly Meeting Tuesday, Pierce said the borough stands to lose roughly $20 million, roughly the entire value of the borough’s general fund.
That fund can be used to cover fiscal gaps, but borough code stipulates just how much the assembly can use.
“Prior assemblies have gone and passed a floor, if you will, in our fund balance,” he said. “It said don't go below $14 million.”
Pierce said the borough made cuts this year but it’s still facing a revenue shortfall in the upcoming fiscal year.
“Today we're sitting in a deficit spend projected to spend $2 million this year in FY19, deficit spend” he said. “So we start off with $2 million more than we're proposing to bring in.”
While many have noted that Dunleavy’s spending plan is just a proposal, Pierce said some cuts to school debt reimbursement and fish landing taxes are likely to pass the Legislature. Cuts to those programs alone would cost the borough over $3 million.
Pierce anticipates that the borough will eliminate borough jobs, delay projects, and reduce services.
“If we in fact hit this $20 million mark, how can we fund the cap, fully fund the college, fully fund the community supports that are out there, the EDD, the small business development,” he said. “How can we not have layoffs in the borough side as well as have some tax. We're going to have some taxation, but you can't tax your way all the way out of this.”
The borough assembly also passed a resolution Tuesday asking the Legislature to allow the borough to increase taxes on oil and gas properties. That would allow the borough to recover some of the revenue that would be lost.
