Ballot language set

Posted: Thursday, August 18, 2005

Final language for five propositions headed for the Oct. 4 municipal ballot were approved Tuesday by the Kenai Peninsula Borough Assembly.

Voters will be asked to decide or advise on propositions calling for a 4-percent bed tax, general obligation bonds for Central Emergency Service Area infrastructure expansion, construction of the proposed Funny River Bridge, a limit on how much the borough assembly can spend on capital projects without a public vote, and a rollback and cap on the borough's sales tax.

In some cases, the assembly altered some draft language, making amendments to proposition summaries where they thought appropriate.

Proposition 1 considers a proposal to impose a transient accommodation tax, or bed tax, of up to 4 percent on the cost of short-term stays (less than 30 consecutive days) at hotels, motels, and bed and breakfast rooms. It would be in addition to any existing borough sales tax.

The ordinance under which the tax would be imposed, Ordinance 2005-05 (Substitute), presuming voter approval, allows for cooperative agreements with borough cities to use some of the funds to promote tourism. A quarter of tax revenues would be transferred to a Room Tax Fund for that purpose. The rest would be available for general government operations.

Bed taxes imposed by cities would be offset by up to one-half the borough transient occupancy tax.

A yes vote would authorize the transient tax. It would be up to the assembly each year to actually impose it. A no vote would prevent the borough from establishing a bed tax.

Proposition 2 asks voters to approve the borough issuing up to $2.5 million in bonds to cover the costs of planning, acquisition, design, construction, equipping and financing a fire station in Kasilof and renovating a fire station in the Funny River area.

The debt would be repaid by property taxes within the Central Emergency Service Area. A yes vote would also authorize an annual tax of $15 on each $100,000 of property value. A no vote would prohibit issuance of the bonds.

Proposition 3 is advisory in nature. It asks voters to consider whether the state should build a bridge over the Kenai River, commonly known as the Funny River Bridge, to connect Sterling and Funny River.

The proposition actually will ask two questions, the second whether the borough should contribute either funds of services to the construction project.

A yes vote on the first part would show support for the bridge project, a no vote opposition. A yes vote on the second portion would mean the borough should contribute, a no vote that it shouldn't.

The assembly added new summary language outlining some proposed benefits of a Funny River Bridge, including improving the highway network, offering recreational opportunities, adding access for fire and ambulance services, reducing travel distances, cutting travel time and providing an alternate escape route in the case of wildfire.

A 1997 environmental impact statement, now widely seen as out of date, predicted the project would cost about $9.3 million in 1992 dollars. No accurate cost figures now exist, though it would likely cost well in excess of $10 million, according to borough estimates.

Again, the proposition is merely advisory.

Propositions 4 and 5 were generated by initiative petitions sponsored by a group known as the Alliance of Concerned Taxpayers, or ACT.

Proposition 4, if approved, would affect how much the assembly could authorize spent on capital projects without a public vote. Current law allows the assembly to approve project costs of up to $1.5 million. Prop 4 would lower that to $1 million. It also would require that 60 percent of voters approve such projects.

Current law exempts federal and state funds, along with insurance proceeds, from the $1.5 million ceiling. Prop 4 would require a public vote on projects exceeding $1 million regardless of the source of funds.

A yes vote would approve the change, a no vote would retain the current language.

Proposition 5 would set the borough sales tax at 2 percent of the first $500 of retail sales and require that any future increase would have to be ratified by 60 percent of the voters at a regular election.

In the municipal election last year, voters approved a proposition authorizing the borough to raise the sales tax up to 3 percent. The assembly recently did just that, setting an effective date of Oct. 1. Tuesday, the assembly amended the effective date to Jan. 1, 2006 — after the results of the vote on Proposition 5 are known.

A yes vote would establish the 2-percent limit, rendering the scheduled tax increase moot. A no vote would result in an increase in the sales tax to 3 percent at the beginning of next year.

Borough sales tax proceeds go to the Kenai Peninsula Borough School District. Each 1 percent in the borough sales tax generates education funds of approximately $7.5 million annually and equals roughly 1.67 mills worth of property taxes.

In recent years, the school district has been struggling to make ends meet as costs rose and state financing was cut. In the past two years, the state has increased schools funding, but costs continue to rise.

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