We are your neighbors and we are the Affordable Juneau Coalition. We hope Juneau can become a more affordable place to live and work. We hope incomes can match expenditures sufficiently to keep Juneau affordable. Taxes are a big expenditure. If paying our taxes increasingly erodes our take-home income, can they be considered affordable?
Consider sales and property tax. Community members spend a sizable portion of their income on taxes to fund the $480 million City and Borough of Juneau government budget. Taxes are always painful, and to many, they become unaffordable. Juneau government spending has expanded more than inflation. Ballooning property valuations have fueled a windfall of property tax receipts, and sales tax revenue has been above expectations. Can you afford to fund this windfall to local government? Despite high realized revenues, why does sales tax continue to be collected on food and utilities? Why isn’t the property tax mill rate adjusted down as assessments continue to rise? The average Juneau family now pays roughly $5,000 annually in property tax.
Juneau tends to pride itself on progressive policies, yet sales tax on food and utilities is extremely regressive, placing the heaviest burden on lower income earners. Why does Juneau support sales tax on food and utilities while allowing sales tax exemptions for all nonprofit organizations? We exempt seniors from sales tax on food, why not everyone? Why do we discriminate in taxation? Why do some people get an exemption while others do not? Why not cut sales tax on food and utilities for everyone?
Juneauites have successfully placed two initiatives on the October municipal ballot to (1) eliminate sales tax on food and utilities, and (2) cap the operations portion of the mill rate at 9 mills. Thank you for that support. In October we will have the chance to approve these measures.
Over the past 10 years Juneau government spending per capita has increased well more than inflation. Case in point: We now tax our citizens to annually fund $11 million in Assembly grants to charities and nonprofit enterprises. Charities are entities that appeal to our personal altruism to accomplish community service goals. “Charity” is good and it is voluntary. However, is it charity to be taxed by the municipal government to in-turn support those causes that government finds worthy? Does it make sense that you should be taxed for charitable purposes?
Other interesting municipal expenditures of late include a half million to revise the Comprehensive Plan to make Juneau “resilient and vibrant” (no mention of safe and affordable), $14 million for a rejected new city hall, $9 million for Telephone Hill housing removal (there is no plan for replacement housing — affordable or otherwise), escalation of water and sewer fees, expensive Pederson Hill “affordable” housing, a climate action plan, greenhouse gas emission inventory, short-term rental registration, and a Juneau tsunami report. Are all of these — among many other expenses — truly necessary?
In short, there is little doubt that the municipal government could reduce expenditures and the taxes that fund them. Are we asking too much of local government to lower taxes in order to make Juneau more affordable? Think about it. Eliminating sales tax on food and utilities will not impact the local services you have come to value. Sure, maybe that climate action plan is high on your list, but are there not other sources of climate information?
In the end, lower taxes will reduce the painful monetary compromises that many of our residents must make. Life could be more affordable. When people can better afford to live in Juneau, more people will live and work in Juneau. New businesses will form. Projects like Auk Landing, Eaglecrest summer operations, and a new ice breaker can expand our local economy and population, raising more municipal revenue. Instead of losing population, wouldn’t it be nice to grow a little? Why not provide opportunities for new workers and businesses, and be able to reopen closed schools?
Come October, vote to eliminate sales tax on food and utilities and cap the property tax mill rate for operations at 9 mills. This will hurt no one and it will help everyone.
Frank Bergstrom is a 36-year resident of Juneau, retired mining executive, consultant, contractor.
