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Kenai Peninsula leaders say community cannot subsidize AKLNG as tax talks begin
Summary
Mayor Macchicki told the Kenai Peninsula Borough Assembly that municipal costs from the proposed Alaska LNG export terminal must be covered and warned the community cannot subsidize the project as the state floats a 20-mil to 2-mil levy cut; borough representatives sit on a property-tax working group and may seek a supporting resolution if terms are acceptable.
Mayor Macchicki told the Kenai Peninsula Borough Assembly on Jan. 20 that the borough will press for protections and compensation as talks continue over tax treatment for the proposed Alaska LNG project.
Macchicki said the AKLNG project has two phases — a pipeline that ends in Beluga within the borough and a planned LNG export terminal in Nikiski — and described an administration proposal the governor discussed to reduce the oil-and-gas mill levy from 20 mil to 2 mil. "Our community cannot subsidize AKLNG," he said, adding that municipal costs related to construction and operations must be covered either through mitigation during construction or by a payment-in-lieu-of-taxes arrangement.
Why it matters: Phase 2 of AKLNG would be a multibillion-dollar facility sited near borough communities. Macchicki said the administration and municipalities are negotiating a complex, time-sensitive package and warned against rushing agreements that leave borough taxpayers bearing disproportionate costs.
Macchicki said borough representatives on the working group include himself and Assemblymember Harbaugh; he said the group is seeking more realistic throughput assumptions and other protections before endorsing changes. He noted terms being discussed sometimes tie meaningful payments to very high throughput thresholds ("after there's 1,000,000,000 standard cubic feet a day" in one formulation), and the borough is asking for lower, more realistic triggers and explicit coverage of local costs.
The mayor said discussions could produce a request back to the assembly for a formal resolution of support if acceptable terms are reached. He emphasized the borough's interest in revenue arrangements that reflect local impacts and avoid shifting costs to residents: "...it cannot be off the backs of our taxpayers." The assembly did not take any formal action on the working group's negotiations during the meeting.
Next steps: Macchicki said he will continue participating in the property-tax working group; the administration will return to the assembly as negotiations progress and may ask for formal direction or a supporting resolution if terms are negotiated with the state and project proponents.
