Budget concerns will likely dominate the conversation at the Kodiak Island Borough in the early months of the new year.
“The biggest thing that we’re going to have to deal with is going to be the budget,” Borough Mayor Bill Roberts said.
The borough assembly will look to stave off a tax increase while balancing the needs of the school district, building maintenance and general government function.
Last year, the assembly approved a budget that did not raise taxes, but cut the school district’s request for funds by more than $1 million and zeroed out any money for building maintenance. Repairs were already needed at the borough building, the fisheries research center and other locations. Cutting funding for a year did not help the situation.
“We took all our money out of our facilities, and at some point we’re going to have to figure out how we’re going to repair our buildings and maintain the government we want to maintain,” Roberts said.
“That involves spending cuts, that involves possible tax raises and it involves looking for other ways to raise money, although there’s not a whole lot of options out there.”
The assembly has already made a few moves to increase revenues by raising tobacco taxes and the motor vehicles registration tax.
State government maneuvering will also influence what the borough ends up doing. Gov. Mike Dunleavy’s proposed budget for the coming year funds school bond debt reimbursement at 50% rather than not funding it at all like last year.
That cost the borough $5.2 million more than it planned to pay in bond debt. If the debt reimbursement stays in the state’s budget, that will mean the borough will only need to cover half that amount. It’s still a lot of additional money, but less than it was last year.
Through the budget process, the assembly will also be considering changing rules around the maximum allowable tax revenue. Right now, the group is limited in the amount of money it can raise every year. Revenues can only go up for a specific number of reasons, such as inflation, new building projects and bond debt.
That means that bringing in more money in one area, such as tobacco taxes, must be offset with revenue cuts in other areas, like property taxes. But the ballot measure that instituted the limit expires this year, and the assembly is considering altering it or doing away with it entirely.
Elsewhere, the assembly has been wrestling with its solid waste contract with Alaska Waste over the past few months, and those talks will be ongoing. The new contract started in July 2020, and since then, there have been disagreements about how to interpret pricing rules and the addition of things like commercial roll carts.
Recently, the assembly formed a three-person committee to oversee the talks with Alaska Waste and hopefully iron out the differences in the near future.
One issue that’s unlikely to matter in 2021 is money from the Coronavirus Aid, Relief and Economic Security Act, or CARES. Over the past year, the assembly has passed ordinance upon ordinance allocating and reallocating the $5.8 million it got in money. For almost the entire year, the rules stated that it had to be spent by Dec. 30.
But the recent stimulus package that passed Congress on Dec. 27 extended the deadline all the way to December 2021. That was too late for the borough, which spent the last $1.5 million or so of the remaining money before Congress acted.
But responding to the continuing fallout from the COVID-19 pandemic will still be an issue, though hopefully less of one in 2021. And that will mean trying to address some of the hits taken by Kodiak’s small-business community.
“Hopefully, with the vaccine, COVID-19 will be in our rearview mirror come the end of spring. That’s my hope anyway,” Roberts said.
“And then we can look forward to rebuilding our economy, and the place we have to rebuild is small businesses.”