KPB Mayor proposes 2026 Fiscal Year Budget
— Peter A. Micciche
MAYOR PETER MICCICHE PROPOSES BUDGET FOR THE KENAI PENINSULA BOROUGH WITH A DECREASE IN KPB TAX BILLS TO KEEP FAMILIES HERE ON THE KENAI AND GIVE RELIEF TO TAXPAYERS.
WITH THE GREAT EFFORT OF THE MAYOR AND KPB STAFF, THE OVERALL BUDGET COMES IN LOWER THAN LAST YEAR’S FY25 BUDGET.
Mayor Peter Micciche’s FY26 Proposed Budget: for the Kenai Peninsula Borough has been presented to the public and assembly after months of painstaking work delivering a mill rate reduction for taxpayers from 4.24 mills to 3.85 mills and adhering to the mayor’s long-term fiscal plan philosophy of affordability for today’s and tomorrow’s generations of KPB residents. There are also six service areas for which the administration has proposed a reduction in their mill rates. In fact, this year’s general budget is even more conservative seeing a .24% decrease in total overall cost from last year’s, and no new positions added to the general fund this year. The goal is for spending to closely match revenue, with the discipline to remain at or below an approximate 2.5% consumer price index level over time (based on 10-year projections).
Mayor Micciche said, “Unsustainable budgets eventually result in unaffordable mill and tax rates for our borough residents. The KPB must do our part to promote affordability and to keep families here, effectively responding to the recent trend of losing families with children since 2023. This budget is attempting to maintain the correction of that condition for current and future borough taxpayers by maintaining a sustainable trend.”
Highlights of the budget:
- Significant mill rate reductions including the lowest in the general government since 1986 (40 years) and six services areas, which will result in most residents paying less taxes this year than they paid last year.
- An overall decrease in the Borough-wide budget from last year’s FY25 budget; a difficult feat during these high-inflationary times. The Boroughwide expenditure budget is decreasing $428,632. This budget sees the reduction of spending for most functions, but with increases to Education, Solid Waste and Public Safety.
- Generous but sustainable K-12 education funding at $57.6 million while we await the results of the legislative session. This appropriation is a 2.5% increase over last year and at over 90% of the cap; the most generous of any 2ndclass borough in Alaska, such as Matsu and Fairbanks NorthStar boroughs.
- Total education funding is proposed to receive $67.7 million in FY26. This is an increase of $1.67 million from FY25.
- Education consumes 100% of sales tax revenues, 38% of property tax revenues and 21% of other revenues.
- Without additional state funding, KPB taxpayers will pay more to the KPBSD than the State of Alaska by 2027 if we were to provide funding to the cap going forward.
- The budget contains adequate capital funding to “hold our own” on reducing deferred maintenance and maintaining the value of KPB assets.
- Taking into account unsustainable assessment increases of 34% over the past three years due to state statute requirements, the mayor is working with legislators to change state statute to allow increases to be capped at or near 5% annually.
Click on this link to review the KPB Finance budget presentation: https://www.kpb.us/budget-26-presentation
Since taking office, Mayor Micciche and the KPB Team have reduced spending, and costs are essentially under control, with education being the possible exception. Upon approval of this budget, this will be the second mill rate reduction received by taxpayers since Mayor Micciche was elected. This reduction is especially critical because recent extreme valuation increases of 34% in three years on properties around the borough are creating difficulties for many taxpayers. A mill rate reduction, combined with a disciplined focus on efficiency and cost-control, allows the KPB to provide and maintain basic, quality services at current levels that are sustainable into the future. This includes a quality capital and operational maintenance program ensuring the continued use and economic value of borough assets to avoid the added cost of deferred maintenance.
The mayor’s budget includes a level of local educational funding that borough residents can reasonably afford and sustain. The largest component of the borough’s budget is the contribution to fund the Kenai Peninsula Borough School District. The borough’s local contribution is governed by AS 14.17.410. This statute outlines the minimum and maximum amounts that can be contributed to the school district. The required minimum local contribution is estimated to be $35,537,970 and the maximum amount is $62,359,080. The amount the borough has appropriated for FY2026 is $57,634,015 - an increase of 2.50% over FY2025. Compared to other like-boroughs, the KPB is the most generous to schools, contributing an average of 96% of what is allowable by Alaska Law.
Mayor Micciche said, “We are focused on putting ourselves into the shoes of the typical KPB taxpayer and keeping the Kenai affordable. Putting together a sustainable budget like this requires tremendous effort. The KPB team has worked hard to arrive at this point. This budget reflects my long-term goals for the KPB: it delivers basic quality borough services at the lowest cost possible, provides local education funding residents can reasonably afford, funds a maintenance program that maintains equipment and preserves KPB assets, and maintains a sustainable trend that ensures affordability for borough taxpayers.”
Mayor Micciche explains the current budget situation in this Op-ed from the Peninsula Clarion:
Contact Joe Rizzo, KPB Communications Director, at