A municipal budget for the fiscal year starting July 1 that increases property taxes by 2% to 10.24 mills, plus a 5% annual increase in water and wastewater rates for the next five years, got final approval from the Juneau Assembly on Monday night.
While the tax and fee hikes are certain to irk some residents, Assembly members also sent a non-subtle message about a citizens’ group ballot effort to lower what the city can collect in taxes by rejecting an attempt by Mayor Beth Weldon to trim $212,000 from the $535 million budget. Members opposing the mayor’s request cited the months of work spent crafting the budget and adverse impacts the cuts could have to the two entities targeted.
“This is just a lesson to the public and a lesson to the Assembly,” Weldon said after a majority of Assembly members expressed their opposition. “I have just tried to cut $212,000 from our budget and it’s not going anywhere. So when you look at the path ahead this summer please think about what it takes when you reduce revenue and what you’re going to cut.”
The main components of the budget are roughly $140 million for City and Borough of Juneau municipal operations, $152 million for CBJ-owned Bartlett Regional Hospital, $95 million for the Juneau School District’s operating budget and $60 million in capital improvement projects.
All are facing considerable budget uncertainty during the coming fiscal year that may result in shortages due to factors including steep federal funding cuts by the Trump administration and a possible veto of some state education funds by Gov. Mike Dunleavy later this month.
Assembly members were warned at a May 15 Committee of the Whole meeting the city’s projected revenue for the coming fiscal year is about $1.15 million less than expected due to recent state and federal government cuts, which equates to roughly 0.17 mills if residents are asked to make up for that gap — and that more setbacks may be ahead.
The 0.15 increase in the mill rate approved by the Assembly means property owners will pay $10.24 for every $1,000 in taxable value of their properties — equating to $100 more on a $500,000 home for the coming year. Only one person offered public testimony at Monday’s meeting, with downtown resident Ke Mell, expressing her support.
“Please increase the mill rate, pass a balanced budget, we need to pay our way,” she said.
The utility rate increases — passed separately from the budget-related ordinances — are necessary because 2% annual increases in recent years have failed to keep up with operating and maintenance costs, according to city leaders. Various proposals to cover those costs — which now include a possible bond measure this fall — were debated by the Assembly for months leading up to Monday when the 5% hike passed unanimously with no discussion.
City Manager Katie Koester told Assembly members the city currently expects about $517 million in revenue during the coming year, resulting in a nearly $18 million shortfall in the $535 million total budget. However, she said fund balances in city, school district, hospital and other accounts are sufficient to cover the gap.
Weldon sought to cut $100,000 from a $440,000 allocation to the Juneau Economic Development Council — noting the organization has a $4 million fund balance — and briefly revisited a proposed $112,000 cut to Jensen-Olson Arboretum that she said was opposed by all 170 supporting members of that facility when she floated the idea near the end of the budget process.
Strong objection to the JEDC cut on procedural grounds was voiced by Christine Woll, chair of the Assembly Finance Committee.
“We started this budget process back in December,” she said. “We had a conversation about whether we wanted to cut services. To me our partner organizations, the handful of organizations that we regularly provide operational funding for, that is their purpose. They are doing service on behalf of the city.”
Weldon’s proposed last-minute cuts were spurred by ballot petitions setting a cap of nine mills (rather than the current 12), and eliminating sales tax on utilities and essential food items. Supporters of both are still in the signature-gathering process, but Assembly member Wade Bryson said Monday that if voters approve the measures “we would have to come into agreement on how to cut millions of dollars.”
• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.
