City Council Takes Suggestions on What It Should Do About Its Budget Deficit

City council preparing for its community forum. (Photo by Mitch Borden/KMXT)

Mitch Borden/KMXT

The City of Kodiak is facing a $2.8 million budget deficit, according to Deputy Mayor Randy Bishop. He said this to a crowd at a community forum last night focused on hearing what Kodiak residents think the council should do about it.

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A lot more people turned out to a Kodiak City Council work session than normally would last night. That’s because the meeting was dedicated to listening to how residents want the council to balance its $2.8 million budget deficit.

The council’s been trying to figure out a solution for a while. It decided to hold the meeting after hearing a lot of feedback from the public when it proposed raising the city sales tax cap from $750 to $3000.

Councilman John Whiddon laid out some information about the city’s financial situation for the audience before the council opened the meeting to citizen comments. He told the crowd that 65 percent of the city’s budget comes from its sales tax. This year the city will potentially lose over $1 million in state funding. There’s been a 22 percent decrease in sales tax revenue, which he thinks is because of the amount of online shopping. Those are some of the figures the council has to think about as it comes up with a financial plan for the future.

One of the first people to deliver their comments to the council was Mary Forbes.  She was very in favor of the city using taxes to balance the budget.

“I support the alcohol tax, I support the tobacco tax, I support the lifting the cap and putting it at 3,000. I’m probably in the minority, I don’t think you should take away the sales tax on groceries. Everybody has to pay something.”

Paddy O’Donnell, on the other hand, doesn’t want to see the sales tax cap rise, at least not as much as the councils proposing. He thinks the hike will hurt the fishing industry. He suggested if the council does raise the cap that it gives a tax exemption on fuel for fishing vessels.

“We the trawlers are the people that keep this community going, cannery workers working, lights on for a lot of people. That’s the reality of it. So I don’t want you guys to put us out of business.”

Even though he doesn’t live in the city, Kodiak Island Borough Assembly Mayor Dan Rohrer stood up to give his opinion as a local business owner. He believes if city residents want to keep the services Kodiak provides it should raise property taxes to support them.

“The reality is that people that live in the city limits they should pay an increased mill rate in my opinion. They’re the ones that are asking for curbs and gutters and sidewalks and, you know, plowing of those sidewalks and all those types of things.”

After hearing Rohrer’s comment, councilman Whiddon said raising the property tax by one mill would increase the city’s revenue by about $500,000 and that the council was looking into it.

In Tyler Randolph’s opinion, raising taxes isn’t the answer. Instead, the city should go through all of its departments and make a lot of small cuts.

“There’s not one smoking gun where we can go “oh, this one area, budget solved.” There’s lots of little small potato items city budget wide that would all add up to a cart fill that would more than solve this budget issue.”

At the end of the forum, Councilman John Whiddon said although the budget situation doesn’t look positive, he thinks this could be a good thing for Kodiak.

“If we can look at the way that we levy taxes and the environment that those business operate and find a different way to operate, then I think we can help businesses. Whether it’s creating a Kodiak is open for business sign in essence, so that we don’t drive people away. That we actually encourage people to come through economic development.”

The council will continue to discuss different ways it can balance the budget. Community members can still send their ideas to city staff and council members.

 

 

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