Kenai Peninsula Borough Mayor Peter Micciche delivered a comprehensive “State of the Borough” address Wednesday during a joint Soldotna/Kenai Chamber of Commerce luncheon. The address focused on budget stability, property tax relief, school efficiency, and energy planning.
Fiscal Discipline and Core Services
Mayor Micciche emphasized his long-term goal of making the borough financially sustainable without expanding government authority beyond what voters have approved.
“Our job is to operate efficiently within the boundaries residents have set,” he said.
The borough’s FY budget is down 0.25% from last year, with expenditures at $179 million and projected revenues at $180 million. Despite covering 24,000 square miles and managing 19 fire stations, two hospitals, eight landfills, and 600 miles of maintained roads, the borough continues to deliver essential services while reducing costs.
Property Taxes and Assessment Reform
Micciche acknowledged rising property taxes as a top concern among residents, particularly for working families and seniors on fixed incomes.
“To some, $100 more a month might be manageable,” he said. “But for many, it’s the difference between making it and falling behind.”
To help ease the burden, Micciche is proposing reducing the mill rate from 4.3 to 3.85—the lowest in borough history. Depending on location and assessed value, the change could save hundreds of dollars annually for the average homeowner.
Micciche also addressed the steep climb in property valuations based on state law requiring full and true market value assessments. He introduced a resolution to cap annual assessment increases at 5%, calling it a commonsense approach to limit sharp year-to-year jumps that many homeowners have experienced. The resolution narrowly failed in the borough assembly.
“This isn’t about freezing values like other states have done—it’s about creating predictability for residents,” he said. “We need the flexibility to protect taxpayers from sudden spikes in valuation.”
Despite the setback, Micciche said he will continue to advocate for assessment reform and work with the legislature to explore viable solutions.
Education Investment and School Efficiency
Education remains the borough’s largest single expense, and Micciche emphasized that the borough continues to fund schools to the state-mandated cap.
However, he said the current model is becoming increasingly inefficient. Declining student enrollment across the borough has left many schools operating well below capacity, while still requiring full-scale staffing, utilities, and maintenance.
“Half-full schools are not sustainable,” he said. “We need to consolidate where it makes sense so that students can access fuller, better programs.”
Micciche pointed to Fairbanks and the Mat-Su Borough as examples of districts that have already implemented consolidations to keep up with demographic changes. He said the Kenai Peninsula must be willing to do the same if it hopes to keep funding levels sustainable in the years ahead.
“We need to make some tough choices,” he said. “Half-full schools cost significantly more per student and limit access to robust programs like music, sports, and advanced courses. Consolidating into fuller schools gives students more opportunity and makes better use of our education dollars.”
Land, Energy, and Waste Initiatives
Micciche outlined efforts to increase land affordability through a 25% discount program for borough residents who build within a specified timeframe. The program is aimed at increasing local housing supply and stabilizing property values.
On the energy front, he reaffirmed the borough’s interest in the long-term viability of the Alaska LNG project and announced a new borough-wide coalition to address landfill sustainability and emissions. A new solid waste director has been hired to lead that effort.
Staff Appreciation and Final Remarks
Micciche closed by expressing gratitude for borough staff and leadership, noting that delivering services on a leaner budget is only possible because of their dedication.
“Our people deliver,” he said. “They’re the reason we’ve been able to cut costs without cutting services.”
He gave special recognition to Finance Director Brandi Harbaugh, who recently celebrated 25 years with the borough.
“In the end,” Micciche said, “our job is to manage growth, stabilize taxes, and protect the high-quality services our residents depend on.”
