(Clarise Larson / Juneau Empire File)

(Clarise Larson / Juneau Empire File)

City leaders seem determined to drive cost of living even higher with their tax-and-spend appetites.

Opinion: How to make Juneau less affordable

  • By Win Gruening
  • Wednesday, May 24, 2023 2:14pm
  • Opinion

As concern mounted among Juneau citizenry over the community’s rising cost of living, City Manager Rorie Watt initially recommended a lower property tax millage rate of 10.28 that “generates only enough property tax to pay CBJ general governmental costs after consideration of a $1 million lapse.”

This statement ignores two relevant realities: The City and Borough of Juneau Assembly has earmarked or spent nearly $46 million in public funds to date for the planned construction of two government buildings, rejected by voters, which are estimated to cost around $120 million.

Secondly, property tax assessments this year are rising an average of 16% (though some residents report increases of up to 40%), which negates any purported “reduction” in property taxes by the Assembly.

It is disingenuous to suggest that property taxes cannot be reduced further because “general governmental costs” must be covered after tax revenues have been diverted to discretionary projects. Particularly, when those projects have failed to garner widespread community support and have been turned down by voters.

After discussion, the CBJ Assembly approved setting the city’s property tax rate at 10.16. This is, at best, an unconvincing effort to divert attention from an Assembly spending spree that denies taxpayers the relief they need.

The proposed rate reduction is a paltry 3.8% decrease from 2022 when Juneau’s median tax assessed home value had already risen to $527,000 — a 23% increase since 2020. The increase in assessed values without a corresponding reduction in the millage rate translates directly into a higher tax bill for property owners. If viewed honestly, escalating property values over the last two years will cost the average homeowner $1,000 more in tax annually while the Assembly’s proposed millage rate “reduction” only pares it back a measly $200.

While Juneau’s cost of living continues to outpace larger urban areas in Alaska, city leaders seem determined to drive it even higher with their tax-and-spend appetites.

Prioritizing the wants of city leaders over the needs of Juneau taxpayers will not expand the community’s tax base which would reduce Juneauites’ individual tax burden by spreading it among more homeowners and businesses. Indeed, Juneau’s demographics suggest the opposite occurring. The city population is stagnant and school enrollment continues to plummet, placing even more pressure on the municipal budget.

Higher commercial property vacancies in Juneau signal that property owners will be burdened even further. One only needs to roam through the State Office Building to see the empty offices to realize that this will eventually translate to even more vacancies in commercial real estate. Property owners will also be unavoidably saddled with higher tax bills as a growing number of buildings in Juneau have been purchased by tax-exempt entities and these properties, wholly, or in part, will be removed from the tax rolls, shrinking the tax base even further.

It’s irresponsible to erect new government buildings in this environment and force property taxes even higher to pay for them, without approval by voters of their full cost including any past unapproved appropriations.

The precipitous rise in property taxes added to other unwarranted Assembly expenditures, is contributing to next year’s record-setting budget, the largest in Juneau’s history.

For example, the Assembly recently made vote-by-mail city elections permanent though the cost to conduct them is significantly higher than conventional in-person elections. Passed without voter approval, vote-by-mail fails to increase voter turnout, prolongs final election results, and makes fraud and ballot harvesting practices more likely.

While the Assembly continues to promote their “No.1 goal of affordable housing,” the actions taken recently directly work against accomplishing that goal. An unnecessarily high millage rate drives up property taxes and thereby the cost of housing for current and potential homeowners as well as renters. Significantly higher housing costs intensified by budget-busting property tax increases is the single greatest contributor to Juneau’s ever-increasing cost of living.

If the CBJ Assembly is truly interested in more affordable housing and reducing the community’s cost of living, the surest way to accomplish that is through significant spending reductions and a corresponding reduction in property tax.

Is it too much to ask for our Assembly to respect the voters and explore other less expensive alternatives?

• After retiring as the senior vice president in charge of business banking for KeyBank in Alaska, Win Gruening became a regular Opinion Page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.

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