Imagine if the price of unleaded gasoline increased 20% tomorrow to $4.80 per gallon. Most of us would want to know the cause and expected duration of the price hike. Right?
What if the price skyrocketed from $4.00 to $5.50 per gallon and stayed there for an entire year with the likelihood of going even higher? For families consuming an average of 30 gallons per month, the annual cost increase would be $540. For families consuming 45 gallons per month, the annual cost increase would be $810. Most of us would be complaining and demanding answers.
The financial impact of this latter hypothetical is exactly what our CBJ government is doing to us this year through their property tax assessments. Despite falling real estate prices throughout the country, in March CBJ sent out notices claiming most of our home values increased 10-20% in the past year.
CBJ’s assessor claims the average value of single-family homes in Juneau increased 15% during 2022, from $470,000 to $542,000. But these figures don’t jive with data from Zillow.com, which shows local home values increased just 1%, from $457,000 to $462,000. Data from Realtor.com shows local values declined 1% during 2022.
The significant increase by CBJ for 2022 followed a sizable increase in 2021. For example, CBJ’s assessed value of my home, built by my father in 1994, has increased 33% over the past two years.
Don’t be deceived. CBJ’s aggressive valuations don’t make us any richer; these are the homes we live in and many of us hope to pass on to future generations. No, this “paper wealth” actually makes us poorer because more real dollars must come out of our pockets to pay higher taxes.
A potential motive for these highly questionable assessments surfaced on May 17 at the Assembly’s Finance Committee meeting. I was in attendance and learned the city manager proposed setting aside $10,000,000 in this year’s budget towards payment for a new City Hall that voters rejected last fall.
Included in the meeting packet was a May 4 memo from the manager recommending that a similar bond obligation be put back on the ballot this year. The memo claims CBJ has “significant capacity available this year” to take on additional debt. The memo even claims the bond will be easier to pass because it will be for $10,000,000 less – the amount being set aside in this year’s budget!
These facts give rise to an important question: Did CBJ public servants artificially raise the assessed values of our homes in an intentional scheme to help finance an expensive building voters rejected?
Another disturbing component of the manager’s proposed budget is setting aside $50,000 to “educate the public” on the need for a new City Hall. Last year the Assembly turned down a similar proposal on ethical considerations. If one ethical standard is being blatantly disregarded, were others compromised? The public has a right to know.
Our best shot at the truth is an investigation by an independent grand jury. It can subpoena records and testimony from CBJ officials, and then publicly report its findings and recommendations.
While the grand jury is looking into these issues it can also review CBJ’s appeal process, which some locals feel is being administered in a retaliatory fashion. Some residents who have appealed their increased assessments say the assessor threatened to increase their assessments even higher unless they withdrew those appeals. Only a grand jury can protect the anonymity of these residents and save them from further retaliation.
Don’t be misdirected by CBJ officials who at the May 17 meeting attempted to justify the increased assessments by lowering the mill rate from 10.58 to 10.16. The math shows the damage from these record assessment increases is not mitigated by what they tout as the lowest mill rate in decades.
Applying CBJ’s average numbers, a homeowner with a 15% increased assessment to $542,000 will pay $535 more in taxes, from $4,972 last year to $5,506 this year. For a homeowner who received a 20% assessment increase from $625,000 to $750,000, their tax payment will increase by over $1,000, from $6,612 to $7,620.
In other words, that hypothetical $5.50 gallon of gas has become a reality in Juneau.
For residents on a fixed income, tax increases of this magnitude can be disastrous and force some to sell their home. If you live in a rental, expect these increases to be passed through to you.
To offset CBJ’s average assessment increase of 15%, the mill rate would need to be lowered to 9.17. Greg Smith was the only Assembly member who advocated for a mill rate below 10; is he the only Assembly member that has our backs?
A grand jury review of these issues should begin immediately so voters can know the truth before the next election. If CBJ officials have nothing to hide, they should be eager to cooperate.
• David Ignell was born and raised in Juneau. He is a forensic journalist and author of a recent book on Alaska’s grand jury system. He resides in West Juneau.
