Amid rising expenses and decreasing revenues, Soldotna administrators are considering a mill rate increase from .5 to 2.0.
City Manager Mark Dixson…
Dixson: “We’re running the numbers right now with a mill rate increase from .5 to 2.0 and that’s going to raise an additional $750,000 in real property taxes, however that’s still not going to cover all the other decreases in revenue. Primarily that will be sales tax and state revenue sharing.”
Last fall voters across the Kenai Peninsula Borough repealed an ordinance that allowed Soldotna to collect a 3 percent sales tax on non-prepared foods during the wintertime. Dixson says the city’s February quarterly sales tax payment was down $488,777.39 from their 2015 figures, however it’s impossible to tell how much of that loss is because of the voter referendum or low oil prices.
Dixson says another increase in costs is healthcare…
Dixson: “We received a form of holiday last year and only had to pay for eight out of 12 months. Next year we’ll have to pay 12 out of 12, so that’s going to be an additional four percent, which divided into eight is a 50 percent increase. And we haven’t even found out if our premiums are being increased so that’s a minimum of a 50 percent increase for health insurance citywide.”
The council tentatively scheduled their first work session on the budget for 4:00 pm on May 3. Dixson says the finance department is still working through initial figures but will likely recommend the mill rate increase.