Kenai mayor directs draft of city residential property tax exemption

Kenai homeowners could see part of their home's assessed value shielded from city property tax under an ordinance the mayor directed the city manager to draft Wednesday. Residents told the Kenai City Council that assessments are outrunning any relief.

James Basden, a Kenai resident and former borough assemblyman, presented five years of figures from his own tax bills. "My home increased over 18.5% over the last 5 years," he said. Basden said seniors, disabled veterans and young homeowners face annual increases they cannot absorb. Renters pay it through rent, he said. He said the borough exemption increase he backed a year ago buys only temporary cover, telling the council that "in 2 years," he would be back to paying more taxes on his property. Any city action would slow the climb without stopping it, he said, and city revenue would still grow.

Borough voters approved raising the residential exemption from $50,000 to $75,000 of assessed value, effective Jan. 1, 2026. That exemption does not apply to the City of Kenai's own levy. The city rate is 4.35 mills, or $435 per $100,000 of taxable value.

Former assemblyman Peter Manack urged the council to act rather than leave the question to a petition drive. "I would love for this council to take this issue and make it their own issue," he said.

A third commenter, Jim Harpring, suggested the city consider contracting with an outside independent consultant to bring recommendations forward. He pointed to the possible gas pipeline terminus and the housing units the area may need.

The mayor said he would sponsor the ordinance, describing the concept as a $75,000 to $100,000 primary residence exemption. He directed the city manager to bring it forward for introduction at the next meeting, on Aug. 19. He said that timing may or may not allow a measure to reach the ballot this fall. He also scheduled a work session for 4 p.m. Aug. 19, citing a coming fire or police station that will require bonding. City Manager Eubank, addressing the lower end of that range, said, "I do believe we can do a good analysis on enactment of a $75K primary residence exemption."