The City and Borough of Juneau Assembly voted Wednesday to decrease the city’s property tax rate by just less than 4% from last year, which brings it to its lowest point in three decades.
However, that cut is offset by the approximately 13% year-over-year increase in property values, which were cited as the main concerns by Assembly members who voted for the decrease.
This year, the borough’s total assessed property valuation (including both residential and commercial properties) clocked in at around $6.5 billion — a 13% growth compared to just last year. According to city data, in 2020 the median assessed value for a home in Juneau was around $429,000. In 2022, the median was around $527,000 — that’s a 23% increase in just two years.
The mill rate of 10.16 approved Wednesday is a .4 reduction compared to last year’s rate (10.56). For example, the .4 reduction decreases taxes by 40 cents per every $1,000 of property value.
The approved 10.16 mill rate means that for every $1,000 in property value a property is assessed at, there is a tax of $10.16.
Though the Assembly Finance Committee OK’d the 10.16 rate, there is still a chance it could change as the Assembly still needs to pass the budget as a whole.
When the proposed budget was first introduced in April by City Manager Rorie Watt, he suggested a rate of 10.28 mill, which “generates only enough property tax to pay CBJ general governmental costs after consideration of a $1 million lapse.”
Assembly member Michelle Bonnet Hale made the motion to lower the rate to 10.16 which passed 6-1, with Assembly member Christine Woll, the sole assembly member to dissent. Assembly members Carole Triem and ‘Wáahlaal Gíídaak Barbara Blake were absent from the meeting.
“We need a mill rate that both does something to reduce the total property tax, but also makes sure we can pay for city services,” Hale said.
Woll disagreed and said she was more comfortable with a mill rate of 10.28 recommended Watt because it would balance the budget.
With the decrease in mill rate, the city’s proposed budget will essentially be spending more than its making and in effect the city will have to “dip into saving” of around $1.1 million to cover it.
Assembly member Greg Smith said he didn’t think 10.16 was low enough and said the Assembly should be more aggressive. He suggested the rate be reduced to 10, and argued that downward pressure on the budget isn’t necessarily a bad thing.
“We saw the significant growth in property tax assessments, and I don’t disagree with them, but we have control of the mill rate and I think we can provide relief to the property owners this year,” he said.
Assembly member Alicia Hughes-Skandijs disagreed and said downward pressure would mean cuts to city services. She said she’d support lowering the mill rate for a year to “soften the blow” for homeowners given the substantial increase in property assessments this year, but said in the long term substantial decreases in mill rates are not sustainable.
“I think it would just start to emulate what they do up the hill as far as not making real decisions and just paying for underfunding of the government through our savings, which I think is a bad long-term plan,” she said.
Ultimately, Smith’s motion to lower it to 10 failed with 2-5 with Smith and Hale being the only members to vote in favor.
• Contact reporter Clarise Larson at firstname.lastname@example.org or (651)-528-1807.