Along with adopting the upcoming fiscal year’s budget, the Kodiak Island Borough Assembly has also approved a slight reduction in property taxes.
The Borough’s fiscal year 2026’s budget totals $28.9 million in revenue and $30.3 million in expenses. It’s been presented by the borough as a balanced budget, meaning the proposed expenditures won’t exceed anticipated revenues and the planned use of the fund balance.
Some of the larger ticket items include roughly $13 million for education support, $6 million for the debt service, which mainly involves bond payments the borough used for various school construction projects and is typically reimbursed by the state and $2 million for the Kodiak Fisheries Research Center.
Going into future fiscal years, Bo Sedillo-Whiteside warned the public and his fellow assembly members that the borough won’t be able to maintain its current spending levels.
“So to continue facilitating a larger or flat percentage ask for certain large budget items, we will have to entertain lifting the tax cap," Whiteside said. "So that needs to be said out loud. People need to understand that that’s coming without us reducing what we’re spending.”
Assembly member Larry LeDoux said point blank, “we’re going into a fiscal crisis.” He argued that the Borough Assembly should not be lowering the mill rate and should be considering the fiscal future for the school district, the borough and the community as a whole.
LeDoux was also supportive of suspending the tax cap, increase the mill rate when needed and doing away with the “smoke and mirrors” of MAPTR in the future. That strange acronym MAPTR stands for the maximum allowable property tax revenue.
Essentially this tax cap, which is established in Borough code, requires that the amount of property tax collected next fiscal year [FY’2026] cannot be more than the property tax collected this fiscal year [FY’2025], with some exceptions.
Whiteside added that the assembly should be budgeting and setting the mill rate to fund this upcoming fiscal year only. One mill represents $1 of tax for every $1,000 of assessed property value. For example, a mill rate of 10 means you will pay $10 for every $1,000 of your property’s assessed value.
Assessed property values have gone up in recent years while the mill rate has gone down at least the last two fiscal years; in FY’2024 it went from 10.25 mills to 9.25 mills in FY’2025 and then to 8.91 this year in FY’2026.
At the same time, the school district’s financial request to the Borough has gone up slightly year to year. This year the school district asked for nearly $13 million, which the Borough Assembly unanimously approved during a special meeting on May 29.
Borough Manager Aimee Williams said there is a danger in giving the school district a larger contribution while also reducing the mill rate.
“So when it comes to school funding, as long as our assessed values go up, our window of what we can contribute will go up. And it just depends on what the school district asks and, of course, what the Assembly votes on," she explained. "But previously when they were at odds with each other and a cut had to be made, it didn’t come from the school budget. It came from the borough budget.”
Williams added that there are so many unknown factors right now like what the final school bond debt reimbursement amount from the state will be or how much the incoming fishery severance tax amount for the borough will be.
Assembly member Ryan Sharratt argued that difficult financial times are coming for everyone and that’s why the borough needs to have a sub-nine mill rate this budget cycle.
“I fully agree that we need to do our best and due diligence for supporting the school," Sharratt said. "However, we also have a population base that we also represent in our constituents. So I just cannot support anything above a nine mill rate.”
He made the motion to reduce the borough-wide mill rate to 8.91 mills, which involves taking $150,000 out of the general fund and moving $30,000 of that to nonprofits instead of allocating all $150,000 to the Parks and Recreation budget. 8.91 mills also still covers the full request from the school district and zeroes out the money going into the facilities maintenance fund for the upcoming fiscal year.
The Borough Assembly approved that change and the overall budget with a vote of five to zero. Assembly members Scott Smiley and Dave Johnson were absent from the June 5 meeting.
