Homer Fiscal Planning Model: Background Report

Abstract

Homer is a first-class city of about 4,000 residents, located in the Kenai Peninsula Borough. The city provides a variety of local government services including police and fire protection, roads maintenance, and parks and recreation as well as a library, but excluding schools (provided by the Borough). These services and general government expenses are financed primarily through sales and property taxes and transfers from the state. City expenditures increased rapidly through most of the 1980s, interrupted only during the recession years of 1988 and 1989. An economic boom occurring at the end of the decade has now passed, and the ability of the city to fund services is being constrained both by the local economic base·and the budget problems facing state government. The 1992 Homer budget reflects a sharp reduction from the previous year, with departments planning layoffs and service cutbacks. Aggressive fiscal planning in future years will be required to minimize the negative effects of budget shortfalls in the coming years. This document provides information to assist the community in addressing this issue.