Kenai Peninsula Borough Mayor Mike Navarre announced Tuesday that he plans to run for re-election.

“I care very deeply about the Kenai Peninsula Borough,” Navarre said at the joint Kenai and Soldotna Chambers of Commerce luncheon at the Soldotna Regional Sports Complex. “I’ve got a lot of experience and information I’ve accumulated overtime. I’m going to keep doing the job the way that I have been doing it.”

He said during his last campaign he refused to say he was going to cut taxes and government because every candidate says that and doesn’t follow through.

Cost and budgets go up annually, he said, but while campaigning previously he said he was going to get spending from reserves “under control.”

He said the borough achieved that goal with more than a $1.5 million surplus between revenues and expenditures. Sales tax revenue increase, additional unanticipated state funding and good budget management are three contributing factors to the surplus, he said.

However, the increased property tax exemption from $20,000 to $50,000 approved by voters impacts the borough by taking away about $1.3 annually in revenues, Navarre said.

“Which means that surplus that we had last year pretty much just went away,” he said.

Service areas are going to see some of the biggest impacts from that change, citing a $450,000 drop in revenue to Central Emergency Services as an example. He said he doesn’t have a solution of how to deal with the funding loss, but as the borough works through the budget process for fiscal year 2015, he expects to find an answer.

The borough assembly decision not to pass a senior property tax exemption ordinance to cap that tax break at $300,000 and not allow for the additional $50,000 tax break for all property owners on top of that, will also affect the budget, he said.

He said seniors use emergency services more than any other group, but they’re exempt from paying for them. He said if he doesn’t evaluate that area of the budget, the burden is going to shift to other demographics.

Another concern in the budget is funding for the school district.

“The school district, as I’ve said before, is our most important responsibility — educating our kids,” he said.

With the district facing a $4.5 million deficit, Navarre said district officials have requested an additional $1.5 million in borough funding to the $43.5 it gave last year. Without knowing yet how much the state will contribute, he said the borough can’t determine how much it will fund.

In Juneau last week, Navarre testified to legislative committees about two bills that will affect the borough.

House Bill 19 is a bill for permanent registration on vehicles more than eight years old. He said that would provide the borough with between $500,000 and $800,000 less in revenue each year. He asked the committee to allow local governments to determine how to manage it.

“Every time there’s a cut somewhere it either ends up in a reduction of services or an increase or a tax shift somewhere else,” he said.

Navarre also testified to Senate Bill 138 — a bill to allow the governor to negotiate on a major gas pipeline project. He said with Nikiski selected as the preferred site for a liquid natural gas plant and terminal for the Alaska Pipeline Project, it could triple the borough’s tax base.

A payment in lieu of taxes is proposed for the project, which he said might make sense with its immense size, but he wants to know how a PILT would be calculated and allocated. If the companies with the project are going to pay the state and then the state determines how to divide the money, Navarre said the borough will be in a battle with other regions in the state over the funds.

Kaylee Osowski can be reached at kaylee.osowski@peninsulaclarion.com.