Kodiak Island Borough staff reviews 2023 budget process and property-tax cap formula

First up on the agenda was a presentation on the process for the borough's 2023 fiscal-year budget, including a detailed explanation of the borough's maximum-allowable property-tax revenues formula.

Staff member Dora said the cap is set in Kodiak Island Borough Code 3.2503 and summarized the mechanics: the prior-year approved levy creates the baseline, the cap can increase for new construction, voter-approved service areas, new judgments and declared emergencies, and the calculation applies a consumer price index (Dora said the Anchorage CPI is used in the formula). "The maximum allowable property tax revenues is in KIBC code 3.2503," she told the assembly. Dora also said the borough will bring an ordinance next month to clarify that debt-service principal and interest should be excluded from the cap calculation because the borough accounts for debt service in a separate fund.

Assembly members raised several concerns about how the cap operates in practice. Assemblymember Scott Smiley warned that rapid increases in assessed values and difficulty for assessors to fully keep pace with market changes…