Kodiak Borough sets mill rate at 8.75 in split budget vote

The Kodiak Island Borough Assembly voted 5-2 Thursday to set the property tax mill rate at 8.75 for the coming fiscal year, turning down an amendment that would have raised the rate to 9.15 and directed additional revenue to the school district.

The rejected amendment would have moved $475,981 to the school district fund. Supporters of the higher rate argued the amendment was about preserving next year's revenue baseline as much as it was about school funding. The Assembly then adopted the 8.75 option, designated Option D, on the same 5-2 margin, following a procedural amendment to adopt that option before approving the ordinance as amended.

Before the final vote, the borough manager corrected a calculation error in the Option D figures, noting she had included $67,015 in salary costs that should not have been attributed to the general fund. The correction left the mill rate unchanged at 8.75 but increased the facilities maintenance allocation from $320,000 to $380,000.

A Baseline That Cannot Be Recovered

Supporters of the higher rate argued the vote carries a lasting consequence. Under Alaska's Maximum Amount to be Raised Through Required Local Contribution formula, what a borough collects in one year sets the baseline for the next. One member who backed the higher rate warned: "If we're going to keep the system intact, we must collect to the cap. And yet, if any of the economic contingencies that we were worried about at the last meeting actually happen, that $500,000 deficit is permanently wiped off the top of next year's starting baseline. We cannot recover it."

Supporters of the lower 8.75 rate countered that Option D still represented an approximately $800,000 increase in school funding over the prior year, balanced the budget, and preserved roughly $500,000 in MAPTR capacity for the following fiscal year.

The Cost-of-Living Argument

Supporters of the lower rate pointed to rising costs. "KEA raised their electric rates by 12.5%," one member said, adding that the city is considering a 5% water and sewer increase. Another member said his own family nearly left the island: "My family's back is breaking. We were going to move from here, um, just this past winter because we're just watching it go up and up, and it's harder and harder to run a business and, and to get by."

What Remains at the School District

Opponents of the lower rate disputed the claim that the school district was adequately funded. "There's not a whole lot left at the school district," one member said. "We're not just cutting fat, we're cutting bone." A member on the other side countered that the district had found roughly $900,000 in internal efficiencies without cutting any positions.