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Kenai Peninsula Borough asks state for authority to cap annual assessment increases at 5%
Summary
Mayor Michicky introduced resolution 2025-017 asking the Alaska Legislature to grant municipalities the option to cap year-over-year assessment increases at 5% to smooth rapid valuation spikes; staff and assembly members debated implementation details and impacts.
The Kenai Peninsula Borough Finance Committee discussed resolution 2025-017, in which the mayor asked the Alaska Legislature to provide municipalities authority to impose a voluntary cap — proposed at 5% — on annual increases in real property tax assessments.
“Things moving too quickly is not good for anyone,” Mayor Michicky said. “A max 5% increase is manageable ... It’ll help people to budget for their future, expenses on paying those property taxes. And frankly, the best part is it's voluntary.”
Adena, who identified herself as an assessing department employee with 15 years’ experience, described the borough’s current process and the source of sharp increases. “We take market data ... We separate those into market areas, neighborhoods, and then we research and update that data each year,” she said. She told the committee that some borough areas have increased more than 5% and that the department trends values over three years when possible. The assessing staff said the state law currently requires “full and true value every year,” and that the department is constrained by that requirement.
Assembly members pressed staff on details. Chair Tom Smith and others noted the resolution was placed on the finance committee agenda although it had been originally listed for the policies and procedures committee; staff said the paper packet placement was inadvertent and the electronic version would be corrected. Legal counsel (Mister Kelly) told the committee the draft amendment references Title 29 and that proposed language would need legislative refinement: “This is really just asking for this authority and, proposing a possible legislative amendment, but also recognizing that's gonna be in the hands of the state legislature to iron out.”
Committee members asked how the cap would treat physical improvements. Mister Kelly said the drafted change would not apply when an assessment increase is the result of addition of structures or improvements previously unknown to assessors. Adena said implementation details — e.g., whether values would be frozen or trended after a starting point — would be determined if the legislature grants authority.
No committee vote or final action on the resolution is recorded in the transcript excerpt; committee discussion covered the policy rationale, implementation questions (treatment of improvements, start/trend mechanics), and potential impacts on borough revenues and taxpayers.
