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Kenai Peninsula Borough considers asking state to allow local cap on assessment increases
Summary
Assembly members questioned a mayor-sponsored resolution asking the state legislature to give municipalities authority to limit annual property assessment increases to 5%; the mayor argued the tool could smooth rapid valuation spikes that hurt seniors and lower-income residents.
The Kenai Peninsula Borough Assembly discussed Resolution 2025-17, a request from Mayor Michicky and Assembly Member Cooper asking the Alaska Legislature to give municipalities the authority to cap year-over-year real property assessment increases.
Mayor Michicky said the draft resolution would merely provide local governments “a tool in the toolbox” to limit sudden valuation increases and described 5% as an initial threshold that “more dovetails with our system.” He told the assembly the borough’s average year-over-year escalation over the past 34 years is 4.33%, and that “5% would be rare here.”
Assembly Member Johnson, drawing on his experience on the borough board of equalization, asked how a property that rose 50% in value would be corrected and whether that correction required a sale; the mayor said catch-ups used to happen when properties had not been assessed for many years and that modern processes and imagery have reduced that problem. Johnson also asked whether the mayor’s percentages were borough-wide averages; the mayor confirmed that the figures include real property, oil-related, and personal property.
Members pressed the mayor for data and examples. Mayor Michicky said staff had requested specific questions in advance but had not received them and that the resolution is more conceptual than a specific ordinance. He cited recent periods of rapid escalation — a 19.28% increase from February 2021 to February 2023 and a 30.11% increase over the last four years — and said the borough could consider a higher cap or a temporary activation of a cap during periods of rapid valuation growth.
Assembly members also asked whether a cap would substitute for mill-rate adjustments; the mayor said it would not replace control over the tax rate but would provide a way to “smooth” rapid assessment increases that can price out young families and seniors. The mayor said the resolution is a request to the state to allow local discussion and legislation; he noted Title 29 currently restricts municipal authority on this issue and said the borough “doesn’t have the right to have the discussion” without state authorization.
There was no committee vote recorded on the resolution during the session. Members asked for more data, including average escalation over recent five-, 10- and 20-year spans; the mayor provided some period averages on request and offered to provide additional property-level examples and historical data for further consideration.
The resolution was identified in the packet as Resolution 2025-17 and was presented by Mayor Michicky and Assembly Member Cooper.
