Despite positive economic indicators in the third quarter of 2015, the City of Kenai’s revenue saw two substantial declines during the fourth quarter.
Kenai Finance Director Terry Eubank says the biggest hit came from the property taxes that are paid by oil and gas assets which fall under Alaska Statute 43.56.
Eubank: “Any pipelines that bring natural gas from the wells into the system or from oil wells in, those would be 43.56. Other 43.56 assets would be drilling rigs because they’re used in exploration and some of the oilfield service companies, some of their assets where they’re used to support those industries. And that’s where we’ve seen a significant decline this year of about 26 percent. Those rigs have left, they’re either going to the slope to do work or they may be out in the borough somewhere working but their no longer in the City of Kenai.”
Eubank says that’s not the only indication of the downturn of the state’s oil and gas industry, there was also a decrease in taxes paid on sales within the city…
Eubank: “We saw a little over a four percent decrease in taxable sales from what it was a year prior, which was different for us than what we were thinking.”
In 2015’s third quarter, the City of Kenai saw a 3.67 percent increase in taxable sales.
Eubank says overall in 2015, the number of real property and private property taxes increased.