The Kenai Peninsula Borough assembly and the mayor are shaping up this year's budget deliberations as a tradeoff between paying for schools and paying for tax relief. That's one way of looking at the budget, but it's more complex than that.
Earlier this week the assembly decided to let voters weigh in on whether to repeal the nine-month grocery sales tax exemption. Borough code says that all sales taxes go to the Kenai Peninsula School District, so ending the grocery sales tax exemption would effectively funnel another $2.8 million to our schools.
The school board already passed a budget for next year of $137.3 million budget that includes spending $3.5 million from its fund balance, which is simply the district's savings account.
We're not going to quote too many more dollar figures here because that gets us into the weeds. Instead, we want to discuss policy and philosophy.
First off, it's a little simplistic to see this budget question only in terms of schools versus tax relief. If voters choose to repeal the nine-month tax moratorium, that doesn't necessarily mean they want more money to go to schools. Conversely, keeping the tax exemption in place doesn't necessarily mean voters think schools should go without. After all, the borough chipped in some property tax money for the school district when it set the budget last year.
That means it is just as likely that voters want to keep the grocery tax relief, but also want adequate spending on schools.
Second, why is the school district in a position to have to tap its savings account -- again this year -- to operate the schools? By many accounts the school district has a healthy fund balance, but it won't stay that way for long if it keeps being tapped.
Here's the kitchen-table version of this dilemma. An average Peninsula family -- parent(s), some kids, maybe a family pet -- is faced with this question: Do we want to spend a little more at the grocery store all school year to make sure the kids have a decent education? If we can't have both, which do we want more? Why can't we have both -- a cheaper grocery bill and a decent education for the kids?
Or, do we pay a little more up front in the form of sales tax, or does it come out of our pocket down the road, in the form of increased user fees to make up for cuts?
Certainly, setting a municipal budget is far more complex than that. Throw in the $12 million price tag the borough has to deal with this year for a new waste transfer facility in Homer. Lots of moving pieces and competing needs, and lots of possible solutions, some better than others, but none with a guarantee.
So, why are we having this conversation? Because, with a minimum contribution to the school district already approved by the assembly, and without a boost in revenue from the Legislature or significant cutting to the borough budget, the the bills are going to be paid by Peninsula taxpayers one way or the other.
But we'd like to assume that the members of the assembly and the school board, and the borough mayor and the school superintendent, are keeping that kitchen-table dilemma in their minds as budget deliberations continue.
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