Property taxpayers will see some major relief next year if the Kenai Peninsula Borough Assembly adopts a proposed 1-mill drop in the mill levy.
Mayor John Williams has proposed cutting the boroughwide mill rate as part of his fiscal year 2008 borough budget set for another public hearing Tuesday in Soldotna.
He also will introduce Resolution 2007-035, a measure setting the mill rates for the coming fiscal year for the borough, its 13 service areas and the fund supporting Kenai Peninsula College.
By law, the mill rates must be set before June 15.
The boroughwide 1-mill decrease in the tax levy, which Williams has long said he would try to accomplish, would cut $100 from the annual property tax obligation owed by property owners for every $100,000 in assessed value of their properties.
Thus, the owner of a $100,000 home, who now pays $650 a year in taxes to the borough’s general fund, would pay $550.
Except those exempted from property taxes, every borough property owner also pays mill rates for the service areas they live in, and for the college Post-Secondary Education fund, which itself is not a service area.
Some funds will require an increase in their local mill rates, while others could see their mill rates shaved.
For instance, the resolution proposes cutting the mill rate for the boroughwide Road Service Area from 1.40 mills to 1.30.
Likewise, the Post-Secondary Education mill rate, now at 0.10 mills would fall to 0.08. Craig Chapman, borough finance director, said unlike service areas, the education fund needs no fund-balance at the end of a fiscal year.
Because it actually has one, the mill rate is being cut for at least one year as the excess funds are absorbed by annual costs.
The mill rate for Central Emergency Services, currently at 2.35 mills, would increase to 2.55 if the resolution is adopted.
If adopted, the new mill rates would take effect July 1.
“The tax revenue generated from these tax rates will provide the largest single source of funding for the borough’s fiscal year 2008 budget,” Chapman said in a memo to the assembly.
The 1-mill cut in the general property tax will cut revenue by just over $1 million, but increases in property values and other revenues sources will make up for the loss.
For instance, the increase in the sales tax set to take effect in January will boost revenues. So will the increased state appropriation ($2.19 million) meant to ease the borough’s obligation to the Public Employee Retirement System.
The state also has appropriated about $183,000 for other debt reimbursement.
In all, the revenue stream for the proposed 2008 budget is expected to amount to just over $106 million, roughly $13.7 million more than in 2007, according to the proposed budget document. Together, property and sales tax revenues represent more than 70 percent of total revenues.
If adopted as proposed in Resolution 2007-035, the following Kenai Peninsula Borough mill rates would remain as they are:
· Nikiski Fire Service Area, 3.00 mills
· Bear Creek Fire Service Area, 2.25 mills
· Anchor Point Fire and Emergency Service Area, 2.00 mills
·v Kachemak Emergency Service Area, 1.75 mills
· Lowell Point Emergency Service Area, 1.75 mills
· Central Kenai Peninsula Emergency Medical Service Area, 1.00 mill
· North Kenai Peninsula Recreation Service Area, 1.00 mill
· Seward/Bear Creek Flood Service Area, 0.50 mills
· Nikiski Senior Service Area, 0.20 mills
· Central Kenai Peninsula Hospital Service Area, 1.00 mill
Hal Spence can be reached at firstname.lastname@example.org.
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