Though the community of Nikiski on the Kenai Peninsula only has about 6,500 residents, its fire department boasts a $5 million budget. Most of that hinges on the fact that it’s the seat of the oil industry on the Kenai Peninsula.
The community has reaped the benefits of local property taxes levied on the oil and gas properties nearby to pay for services since the first oil boom in Cook Inlet in the 1960s.
That would change should the Legislature pass Senate Bill 57, Gov. Michael J. Dunleavy’s request to repeal municipalities’ ability to tax oil and gas infrastructure.
The Kenai Peninsula Borough would lose out on about $14.7 million, or about 11 percent of its annual revenue. Impacts would ripple all over the borough, according to Borough Mayor Charlie Pierce. Nikiski’s fire department would lose about $3 million of its budget; to recover those expenses, the property taxes there would have to be raised to about 17 mills, or $17 on every $1,000 of property value.