The Kenai City Council met on Wednesday, December 20th to discuss a new personal property tax exemption ordinance that could benefit small, local businesses.
The ordinance (3382-2023) would amend Kenai Municipal Code regarding how real and personals property are taxed. Residents and businesses in Kenai would be able to be exempt from the first $100,000 of their assessed personal property. It does not include watercrafts, aircrafts, or motor vehicles.
Samantha Springer, the Executive Director for the Kenai Chamber of Commerce, showed her support by speaking at the meeting during public comments.
“Obviously as a representative of the Kenai Chamber of Commerce and Visitor Center, I think this is a move that will really help our community, making them more business friendly and I just wanted to, you know, again show our support,” said Springer.
According to City manager Terry Eubank, the city of Soldotna and the Kenai Peninsula Borough already have this exemption in place for them. Eubank believes that this is one way that could work as an incentive to attract more businesses to Kenai.
“We’ve implemented storefront improvement programs and incentive type programs to assist businesses within our community and I think this is just a continuation of that investment. Like I said, it also puts us on a level playing field with neighboring jurisdictions regarding the tax on personal property.”
Eubank mentions that this would be a bit of a decrease in revenue for the city. But he does not see it as a total revenue decrease, but instead an investment in the city.
“This really doesn’t benefit a private individual, but it does benefit our businesses under the city’s current tax rate, which is 4.35 mills, $100,000 exemption would provide property tax relief of about 435, maximum of $435 in total, based upon last year’s assessed value numbers working with the borough, it’s estimated that this is about a $35,000 revenue decrease to the city,” says Eubank.
After the information was provided, Vice Mayor Henry Knackstedt shared excitement in making this vote. This specific ordinance was an extremely unique case, given that all members of the city council were sponsoring it.
“It’s not very common for a municipality to reduce taxes. They contemplate maybe raising them sometimes, but to reduce them, [and] what this does is it puts Kenai on a level playing field like the city manager said, with the other municipalities and I think that’s appropriate.
After a vote ordinance was enacted by 6 yes votes and 1 absent.