Anchor Point's growth praised

Borough mayor discusses property, sales taxes

Posted: Thursday, September 27, 2007

Though it is doing so slowly, economic indicators show the community of Anchor Point is growing steadily and contributing to the overall economy of the Kenai Peninsula Borough, Borough Mayor John Williams said in Anchor Point on Wednesday.

Williams, on his way to Homer for a Wednesday contract negotiating session with South Peninsula Hospital and today's opening of the Bed and Breakfast Association of Alaska's annual convention, made his comments to an Anchor Point Chamber of Commerce luncheon crowd.

Among other things, Williams noted that Anchor Point's population (about 1,800 as of 2006) made it second largest among lower Kenai Peninsula communities behind the city of Homer (5,454) and just ahead of Fritz Creek (1,723).

Compared to the 2000 census figure of 1,845, it appears Anchor Point's population has fallen, but Williams said those numbers might be disputable. Indeed, across the peninsula, population changes since the 2000 census "are not that significant," he said.

He went on to note that the median age in Anchor Point is 39 years, and the median family income is $49,821 annually, about in the middle of the field boroughwide. The annual payroll, according to state figures comparing 2004 and 2005, is rising, from just under $4 million in 2004 to better than $4.2 million the following year, Williams said.

The administration's position regarding property and sales taxes was also on the mayor's agenda for comment. Pointing out that the borough collects about $5 million per mill in property taxes while taking in roughly $9 million for each cent of sales tax, he reiterated the reasons behind the administration's decision to cut the property tax by a full mill this year, and impose a controversial one-cent increase in the sales tax effective Jan. 1.

"We needed to shift our tax structure so as to reflect a greater revenue for sales tax than we were getting from property tax," he said. "I wanted to see a little bit of relief to the homeowner and the business owner in property tax."

State law allows homeowners an exemption from property taxes on the first $20,000 of assessed value. It is up to municipalities whether to institute the savings, and the borough has. No such exemption exists for business property however.

The one-mill reduction in the property tax adopted by the assembly this fiscal year does provide the same relief for business property as it does to homeowners, Williams said. The flip side of the tax coin was the increase in the sales tax.

"You may call that a shell game, and that we made a lot of money," the mayor said. "The truth is, yeah, we will pick up some extra revenue. The opposite of that is had we not done it that way I would have had to raise the mill rate almost a full mill in order to compensate, and that was exactly what I didn't want to do."

While that will mean everyone paying a little more for items purchased in the borough, it will mean fully one-third of the total $27 million collected from the 3 percent sales tax will come out of the pockets of visitors.

Rising costs drove the decision to restructure the borough's tax revenue stream, he said.

Williams also discussed the ongoing South Peninsula Hospital expansion project, saying the major glitch discovered this summer the lack of a required Certificate of Need from the state should be resolved by mid-November.

At that point, the hospital would begin using the newly constructed areas completed in Phase 1, and bids would be opened and the contract to build Phase 2 awarded, Williams assured his listeners.

In all, the expansion project will cost more than $33 million, but once completed, will bring the medical facility up to standards, make it compliant with the Americans with Disabilities Act provisions, resolve patient privacy issues, and make South Peninsula Hospital "a first-class facility for years to come," the mayor said.

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