Kodiak City Council looks at raising the city’s property tax

Mitch Borden/KMXT

The city of Kodiak has had the same mill rate for over 30 years, but that could change. At its work session on Tuesday, January 2018, the Kodiak city council discussed the possibility of doubling its mill rate from two mills to four.

The millage rate is used to assess the amount of property tax landowners pay.  A mill is equal to about a dollar taxed per $1000 of a property’s assessed value. The Kodiak Island Borough also charges a property tax to its residents, which affects those who live in the city. The borough’s rate is 10.75 mills.

The council is trying to figure ways it can continue to cut its budget and generate more revenue. The city has to set its mill rate with the borough annually every summer. So, the council discussed if increasing its rate by 2 mills this year was a good idea. Councilman John Whiddon said it could be a way for Kodiak to diversify the way it raises funds.

“From a fiscal policy perspective, we need to take a look at other ways to generate operating funds because I think our over-reliance on sales tax is actually an Achilles heel right now because it’s going to be more and more difficult to hit those sales tax numbers over time for a variety of reasons.”

Currently, the city’s sales tax provides most of its operational budget. Generally, the council reacted positively towards the idea of raising the rate. Kodiak earns about $1.1 million dollars from its property tax, according to a report from the city.

Council members said raising the mill rate could help Kodiak with a number of things, but Councilman Rich Walker pointed out the council should be careful when it comes to increasing its property tax. Especially when the borough could also raise its mill rate.

“We need to really look at this closely before we start looking at taxing people more and more.”

Walker said the city should reach out and discuss raising the rate with the borough. The council agreed. Mayor Pat Branson instructed staff to set up a meeting with the borough manager and mayor to discuss the possible increase of the city’s mill rate and how it’d affect the region.

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