A mill rate decrease and maximum funding for the school district are components of Kenai Peninsula Borough Mayor Charlie Pierce’s proposed borough budget for the upcoming fiscal year. Fiscal year 2023 begins on July 1, 2022, and ends on June 30, 2023.

Pierce is proposing a mill rate decrease for the upcoming fiscal year, from 4.7 mills to 4.5 mills. Mill rates are used to figure out how much someone will pay in property taxes during a certain fiscal year. To calculate how much property tax they expect to pay, an individual must divide the mill rate by 1,000 and then multiply that by their property’s taxable value.

About half of the Kenai Peninsula Borough’s revenues for the upcoming fiscal year are expected to come from property taxes, while another 25% is expected to come from sales taxes. All of the borough’s sales tax revenue goes toward funding KPBSD schools. In all, the borough is projecting about $160 million in revenues for fiscal year 2023.

The borough is projecting general fund revenues of about $88.4 million and general fund expenditures of about $94.8 million. Most of the money in the borough’s general fund — about 66% — is expected to go toward education, including for operating costs, debt service and capital projects.

All revenue generated by the borough through sales tax goes to the Kenai Peninsula Borough School District. The borough is currently estimating sales tax revenue of nearly $40 million for the upcoming fiscal year, which marks an increase of about $800,000 from what was forecast during the last fiscal year.

The remaining $12 million would come from property taxes, federal and state revenue and other sources. Also included in Pierce’s proposed budget is $5.25 million in funding for capital projects at school facilities, including money for the borough’s contribution to the construction of a new school in the remote community of Kachemak Selo.

The district last fall identified $420 million worth of maintenance, including $166 million worth of “critical needs.” The district is currently working with the borough to finalize a $65.5 million bond package that, if approved by the assembly, would go before voters this fall and, if passed, fund projects across the district.

The budget proposal also describes a roughly 10% — just over $525,000 — increase in the amount of money the borough expects to spend on various services, such as fees the borough pays to collect remote sales tax, increasing software costs and health insurance costs.

Among the new borough initiatives various borough departments expect to roll out during the upcoming fiscal year are the drawing of new assembly and school board district boundary lines that correspond to the reapportionment plan selected by voters, the completion of a swipe card program to increase safety at borough and school district buildings and the creation of an areawide five-year capital plan.

Also described in the budget as new initiatives are boosts to the borough’s cybersecurity infrastructure, a comprehensive review of borough code by the legal department and continued collaboration by the borough with the Alaska Department of Transportation and Public Facilities for the Cooper Landing Bypass Project.

The final borough budget is subject to approval by assembly members, who have the ability to amend the budget before it passes. The borough’s budget will be up for a second public hearing during the assembly’s June 7 meeting.

A full copy of the draft budget can be found on the borough’s website at kpb.us.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.