Deputy City Manager Mila Cosgrove, left, City Manager Rorie Watt and Municipal Attorney Amy Mead listen during a City and Borough of Juneau Assembly meeting on Monday, Jan. 23, 2017. (Michael Penn | Juneau Empire File)

Deputy City Manager Mila Cosgrove, left, City Manager Rorie Watt and Municipal Attorney Amy Mead listen during a City and Borough of Juneau Assembly meeting on Monday, Jan. 23, 2017. (Michael Penn | Juneau Empire File)

Budget would have ‘dire impact’ on Juneau economy

City manager: Loss of city services, rise in taxes could happen

Municipal leaders around the state are trying to wrap their heads around how Gov. Mike Dunleavy’s proposed budget would affect their communities, and Juneau’s city manager made his thoughts clear Friday.

A release from the City and Borough of Juneau said the cuts proposed in the governor’s budget would translate to a direct loss of $7.8 million for the CBJ. According to the city’s analysis, most of this loss comes from a $7.1 million cut in school bond debt reimbursement.

City Manager Rorie Watt said in the release that the city would have to reduce services, raise taxes and pull from savings to deal with the cuts.

The CBJ Assembly goes through a budget process every year (including right now) where the members carefully consider how to allocate the city’s funds. A portion of this planning depends on how much funding the city gets from the state.

“Juneau Assemblies have managed our municipal finances to avoid precipitous swings in services and taxation,” Watt said in the release, “and this budget proposal would undo 20 or more years of hard work in one fell swoop.”

[Experts: State could lose tens of thousands of jobs if budget proposal goes through]

Since the governor unveiled his budget proposal Feb. 13, local leaders have spoken to the Empire about how cuts and proposals from the governor’s office would affect the Juneau School District, the local fishing industry, the University of Alaska Southeast and more.

The school district could lose as much as $10 million in state funding, which Board of Education President Brian Holst told the Empire could force the district to lose more than 100 employees. The University of Alaska system faces a cut of almost 50 percent. The CBJ release Friday stated that a cut to Medicaid funding could cost city-owned Bartlett Regional Hospital $6.2 million.

“Cuts this large to local government, schools and the University of Alaska would have a dire impact on Juneau’s economy,” Watt said in the release. “Ninety percent of CBJ’s general government budget is funded by taxes, like sales tax and property tax, that are dependent on the economy.”

The future of the Alaska Marine Highway System is also unknown, as the ferry system faces a proposed cut of nearly $100 million in funding, according to presentations from the Office of Management and Budget. The system might also close down at the end of September for the winter if the budget passes as proposed.

[Senators want more answers on Marine Highway closure]

The CBJ’s release states that the economic impact of the ferry system’s closure would be “likely disastrous.”

During a House Finance Committee meeting Thursday, OMB Policy Director Mike Barnhill said the department was put in a tough spot as it decided how to cut the state’s budget, and that has laid the groundwork for tough decisions for the Legislature and municipalities moving forward.

“I think it should be abundantly evident that there are some tremendously difficult questions and choices that are posed by this budget,” Barnhill said.

As Watt and Juneau Mayor Beth Weldon wrote in a letter to the editor earlier this week, this is only a proposed budget and not final. There will be changes as it goes through the Legislature.

“If you’re feeling anxious or panicked by this,” Watt said in the release, “channel that sense of outrage and concern by doing something — engage in the legislative process, contact all state legislators, reach out to the governor’s office, advocate for what you think makes sense.”

• Contact reporter Alex McCarthy at 523-2271 or Follow him on Twitter at @akmccarthy.

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