Mayor Peter Micciche’s budget for Fiscal Year 2024 was voted on and unanimously approved by the Kenai Peninsula Borough Assembly on Tuesday June 6th.
Mayor Micciche said, “I want to thank members of the Kenai Peninsula Borough Assembly for supporting the proposed budget of my administration that works toward a budget that prioritizes the needs of the people of the Kenai Peninsula Borough, through quality services with a focus on affordability, sustainability, reducing waste and finding efficiency”. In the budget transmittal letter (page 9-19 of the linked budget document: budget transmittal letter) Mayor Micciche said, “We’ve attempted to put ourselves into the shoes of the typical Kenai Peninsula Borough taxpayer while planning for an affordable borough well into the future.”
The key principles applied to FY2024 budget are:
- Returning to a balanced budget philosophy for the first time in six years in the boroughwide budget and over 10 years for the general fund.
- Returning to a financially sustainable revenue and spending curve (based on 10-year projections) after 2 years of unsustainable budget increases.
- Delivering a mill rate (property tax) reduction for KPB taxpayers, maintaining a sustainable and strong general fund while providing for a minimum fund balance policy to protect the borough from unexpected expenditures.
- Supporting local education at a level the borough can reasonably afford and sustain, as well as funding capital and operational maintenance to ensure borough assets are well maintained and avoid any added cost of deferred maintenance.
The Micciche Administration is determined to balance the budget now and into the future so that boroughwide expenditures decrease, or if they do increase, they do so at an amount equal to or less than the Anchorage Consumer Price Index (CPI). Between FY2015 to FY2021 increases to the borough’s budget were well above CPI. In FY2022 and FY2023 the borough expenditures increased by 7.57% and 8% respectively (two-year total of 15.57% total) creating an incline in the forecasted expenditure curve that is not sustainable based on the revenues forecasted for the next ten years. Such unsustainable budgets result in unaffordable and unsustainable tax rates for residents. The mayor’s budget brings the borough to a sustainable course with only a 2.55% increase which is well below CPI (in spite of a 6% increase in labor cost negotiated in FY23).
The mayor asserted such fiscal discipline must be applied now to maintain a workable and sustainable expenditure trajectory. The mayor’s budget aligns with recent survey results that noted 72% of KPB residents support quality services with a continuous focus on low cost, finding efficiencies, and eliminating waste. Mayor Micciche said, “Returning to a sustainable spending curve through this budget reset, while still continuing to deliver quality key services for KPB residents, is not a populist philosophy, but a necessary objective. Unsustainable budgets today, result in unaffordable tax rates in the future for our kids and grandkids. This budget, although leaner than typical, places us back on a healthy, sustainable trend for the future of the Kenai Peninsula Borough. I want to thank our KPB staff, service area boards and personnel and assembly members for their hard work creating an extraordinary budget document and for supporting passage through the process.”