SOLDOTNA, AK — Kenai Peninsula Borough Mayor Peter A. Micciche’s Fiscal Year 2027 budget passed the Borough Assembly unanimously on June 2nd, presenting a spending plan built on a continued commitment to fiscal restraint, taxpayer affordability, and long-term financial sustainability.
The proposed budget reflects a modest increase over last year — driven primarily by one-time additional local funding for the Kenai Peninsula Borough School District — while holding the General Fund property tax mill rate steady at its current level, the lowest general government mill rate in the state of Alaska for similar boroughs.
“Our responsibility is not only to today’s taxpayers, but also to the long-term affordability, sustainability and stability of services for future generations,” Mayor Micciche said. “This budget reflects that commitment. I recognize that inflation has been difficult on families and have designed a budget to ensure that the KPB does not contribute to the strain of rapidly rising costs for KPB families and seniors. I want to personally thank the KPB Finance Team for their hard work, as well as each KPB employee and the KPB Assembly for sharing that vision.”
Holding the Line on Taxes
The proposed FY2027 General Fund property tax mill rate remains unchanged — the lowest of any similar local government in Alaska. The Borough also notes mill rate reductions in several service areas. The only exception is a mill rate increase to the Seldovia Recreational Service Area specifically requested by the Community. The KPB continues to distinguish itself as the only local government in Alaska to have significantly and repeatedly reduced its mill rate and increased the residential exemption in response to rapidly rising property valuations.
Sales tax revenues — one hundred percent dedicated to education funding since a public vote in the early 1960s — are projected to see a negligible increase over last year’s forecasted amounts.
Education Remains the Largest Investment
As always, the single largest component of the FY2027 budget is the Borough’s contribution to the Kenai Peninsula Borough School District, with no increase to last year’s $62.3 million, while avoiding the exorbitant strain of funding to the cap, which would have added $6.3 Million more to the $192 million FY27 budget and required a tax increase. Education-related expenditures already represent the substantial majority of the Borough’s General Fund budget. This budget clearly supports education without stressing the wallets of local taxpayers.
CPI-Based Budgeting Philosophy
The Micciche Administration continues its Consumer Price Index (CPI)-based budgeting approach, targeting expenditure growth at or below the rate of inflation over time. While the past two budget cycles reflect slightly higher increases to a 3-year 3.19% average (compared to FY24 at 2.5% and FY25 at 2.57%) due to one-time education funding, the Mayor’s FY27 KPB budget projects the administration’s highly-disciplined effort to control long-term spending in adherence to the 2.5% growth trend beginning the following fiscal year.
Key Budget Highlights
- Affordable Adherence to the Basics: We will do what you have asked of us at an affordable, long-term cost: affordable, quality services that you have requested in the ballot box over time…Emergency Services, Roads, Solid Waste, Education Funding, Service Areas, etc.
- Steady or Reduced Mill Rate: Mill rates were reduced in three service areas; the General Government remains stable at 3.85, the lowest in the state. This is a much-lower mill rate than the last several years. In spite of a 2.1% KPB-wide assessment increase, mill rate reductions coupled with residential exemption increases have kept tax bills relatively flat over the past 3 years compared to all other Alaska boroughs.
- Roads: Meaningful funding has been allocated to the Road Service Area Capital Project Fund for road construction and improvements. Our goal is solving long-term road issues with solutions that last.
- Solid Waste: Solid waste operations represent a significant share of the total General Fund budget. We have finally flattened the dramatic annual increases of the past into sustainable, solid waste budget management.
- Capital Projects: Substantial investment is directed to school facility major maintenance, including HVAC upgrades, roof and window replacements, and security improvements, with additional support for general government capital needs.
- Workforce Restraint: Borough-wide positions were reduced by 1.5 employees. A net reduction in General Services staffing was achieved, and an Emergency Services Radio Technician position was added to the 911 Emergency Dispatch Special Revenue Fund for an end result of 1.5 fewer employee positions.
Financial Condition
After several years of rapid Alaska-wide assessment increases, FY27, Borough-wide taxable assessed values are leveling off this year to a modest 2.1% growth. The Borough’s unemployment rate, as of early this year, remains consistent with anticipated levels. General fund revenues are drawn from a balanced mix of property taxes, sales taxes, state revenue, and federal revenue.
KPB Residents are encouraged to review the full budget document and budget presentation at the Kenai Peninsula Borough website.
“Our staff and service area boards, department heads and virtually every employee have worked incredibly hard to give residents the highest level of service at the lowest cost possible. It takes a great team to internalize that vision and reflect those values in everything they do every day. I’m proud of our current team for making this possible in this local government, something that has not been delivered in most others. We have the team and the values to make it happen. It is the best way to demonstrate to the public that we don’t just say our motto, “We work for you”, we live it every day.” – Mayor Micciche
Press release provided by Kenai Peninsula Borough Communications Director Joe Rizzo.
