Story last updated at 2:23 p.m. Thursday, April 25, 2002

Borough mayor sees tax cut on horizon
by Joel Gay
Staff Writer

photo: news
  Photo by Joel Gay, Homer News
Mayor Dale Bagley talks with Doris Cabana after the Homer Chamber of Commerce luncheon meeting Tuesday.  
While the state suffers through declining revenues and the painful budget cuts or tax increases that must follow, the Kenai Peninsula Borough is healthy enough economically that taxpayers may see another tax cut this year, Mayor Dale Bagley said Tuesday.

"We're in great financial shape," he told the Homer Chamber of Commerce. "You couldn't ask to be in better shape."

His administration is preparing to ask the Borough Assembly for a half-mill reduction in property tax. The reduction of 50 cents per $1,000 of assessed value would be the third cut in as many years for city dwellers. Those outside the cities also had their property tax trimmed, but the Road Service Area assessment rose an equal amount, leaving their tax bills the same that year.

Bagley attributed the borough's financial success to its diverse economy, and with three major industries<> oil, fishing and tourism <> providing employment, the borough is unique in Alaska.

"It's really nice having all three," he said, even if the industries don't always see eye-to-eye on issues. Add logging to the economic mix, Bagley said, "We pretty much do on the Kenai Peninsula what's going on in Alaska."

That's not to say all's well within those industries. The fishing industry in particular, he said, is in dire straits. For that reason, he spurred work on a program to create a generic Cook Inlet brand of red salmon. By lodging the name in shoppers' minds through marketing and ensuring top quality through an independent quality-control agency, fishermen can hope to keep their niche in the salmon market.

With $185,000 in borough financial aid, plus grants from state and industry agencies, the project should start this summer, Bagley said.

The logging industry has gotten a small shot in the arm from federal funds aimed at reducing the fire danger of beetle-killed spruce.

"We're spending the bulk of it now," he said, on right of way clearing projects and fuel reduction sales.

Some have opposed certain timber sales, Bagley noted, "and that's fine. We'll work through those issues," but the borough will continue to offer the sales, he added.

Education is another industry facing troubled times, but there is little the borough can do for the Kenai Peninsula Borough School District, Bagley said. The state limits the amount of money that can be contributed to a school district, and the borough has reached that cap, he said. "We do everything we can."

That doesn't mean efforts to find more money has stopped, Bagley said. A study currently being done in Juneau but which won't be completed until next fall could point up inequities in how Kenai Peninsula schools are funded in relation to other districts, such as the Mat-Su Borough. The Kenai has a greater number of rural schools, which should qualify it for extra funding, he said. The study is expected to give the Alaska Legislature the ammunition it needs to revamp the funding formulas.

"Hopefully the Kenai Peninsula will come out of it (the next legislative session) better than we did the last time," Bagley said.

The mayor also said he planned to continue cleaning up the borough. His effort to get abandoned cars off borough rights of way continues with a $10,000 annual allocation, and roughly 100 vehicles have been hauled away and junked. In addition, he has instituted a clean-up day in which borough employees are let off work to participate in a day-long, spring trash gathering project. It is set for the second Friday in May.

In response to questions, Bagley said he would look into the idea of boosting the 0.1-mill tax assessment that helps fund Kenai Peninsula College. That assessment was established at 0.03 mills in 1994, and has been boosted three times to its current level.

Bagley said that although the bond proposition to renovate or expand the borough administration building failed in last fall's election, he thinks it would pass if a more concrete proposal had been on the ballot. "We need to bring it back with a better plan," he said.

Regarding his veto of the Assembly's resolution regarding the state's fiscal plan, Bagley was unapologetic. "The sky is not falling in Alaska," he said.

His veto was not based on opposition to the idea of a fiscal plan, but rather because he didn't like the specifics put out so far, such as tapping the Alaska Permanent Fund. Other revenue sources should be explored first, Bagley said, such as requiring more from the Alaska Housing Finance Corp. and pushing for construction of a natural gas pipeline.

In spite of what others say is a looming fiscal crisis, he said, "I don't see a cliff in two years."