It’s time to talk taxes, both sales tax and property tax, and discuss the elephant in the room.
First a personal story. A few years after arriving in Juneau in 1968 for a teaching job, I found myself seated at the negotiation table with the school board. In Juneau, contract negotiations between teachers and the school district were still fairly new. We received training from our association that included, “if someone makes a statement that is a generalization about teaching conditions, challenge them and when they can’t back it up, move on with the upper hand.”
During negotiations, School Board president Marilyn Freymueller said, “The teachers’ contract says that teachers are required to be at school at least an hour before school starts; there are teachers that are not following the contract and not staying the half hour after school.” Using my newly acquired negotiating skills, I called Marilyn’s bluff and asked her to name some of them. She enumerated several names and their schools — so much for my new skill.
I learned a lot about negotiations that year and also learned that Marilyn and the other board members should be taken at their word even if we saw things differently.
Over the years, we became good friends and Marilyn co-chaired both of my Assembly campaigns. She only made one request of me as an Assemblyman: Do not collect and set aside more tax money in the budget reserve than necessary. Marilyn believed strongly that the working homeowner families burdened by a mortgage needed to keep as much of their earnings as possible and that they had the right to decide how to divide their earnings between needs and wants. That is still good advice today.
When Merrill Sanford was mayor, the Assembly continued paying down our municipal debt significantly. Lowering the debt millage rate and the operating budget millage rate keeps money in taxpayers’ pockets. The current Assembly declined to lower our debt millage rate which would have helped all property taxpayers.
In the past few years, Juneau has been swimming in money: $53 million in Federal CARES money, $16 million in school bond reimbursement, and funding from the American Recovery Act. The restricted budget reserves and unrestricted budget reserves totaled over $40 million at one time.
After Sept. 30, expect to see a tidal wave of revenue fill city coffers when property tax and sales tax revenues will reach an all-time high thanks to Juneau homeowners, businesses, and cruise ship passenger spending.
According to Tax-Rate.org, Juneau already has one of the highest median property taxes in the United States. So, when CBJ assessors raised property assessment an average 16% this year on single-family homes, people were shocked. Downtown and other areas went up as much as 21% and higher.
The public turned to the Assembly. The Assembly dickered over the millage rate and finally lowered it a bit, but most property tax bills went up significantly. This huge increase was stacked on top of property tax hike rates the past two years. High property taxes won’t attract new residents, especially young families, to balance Juneau’s aging population.
Third quarter sales tax revenue should also truly be phenomenal. Inflation has raised the prices of all goods and commodities, especially groceries. Sales tax revenue shoots upward with inflation. Even if you try to cut back on your spending and are just paying for basics, the CBJ still collects more sales tax on the higher priced goods and services. Add to this mix the record number of tourists that pass though Juneau daily and you have a bonanza of sales taxes never before witnessed.
The elephant in the room is the New City Hall which was voted down last year. Though the vote against it was narrow, it reflected the will of those voting.
The Assembly and CBJ administration make daily decisions on the budget and how to use the money we give them. We need new strong voices on the Assembly, and we do not need to keep the debt rate at 1.2 right now by adding an expensive new project that our children and grandchildren will be paying for over the next 25 years.
The voters have only one opportunity to be heard. Please use it loud and clear in this coming election.
• Ken Koelsch was Juneau’s mayor from 2016 to 2018, U.S. Customs and Border Protection port director between 1996 and 2014, and a local high school teacher from 1969 to 1996.
