Opinion: Vote no on Proposition 2 — debt is a 4-letter word

Opinion: Vote no on Proposition 2 — debt is a 4-letter word

Stay the course and keep reducing our indebtedness.

  • By Ken Koelsch
  • Thursday, September 10, 2020 11:13am
  • Opinion

By Ken Koelsch

I am a child and grandchild of parents and grandparents who suffered through the Great Depression. The mottos “Don’t throw out the back door what you bring in the front door;” Waste not, want not;” and “Use it up, wear it out, make do or do without” still resonate today.

Frugality an

d thrift were necessary to survive during that economic meltdown and “needs versus wants” formed every decision made. If you couldn’t pay cash or barter with trade, you did without. Families rarely bought cars unless they could pay cash. I was lucky. My first set of wheels was a black ‘49 Pontiac Chieftain passed down from my grandparents. It had dents and rust, but it ran and the price was right.

The COVID-19 pandemic has hit Juneau’s economy hard, especially the tourism/hospitality sector. Consequently “needs versus wants” should be closely considered in our municipal election.

When I receive my ballot in the mail for the Oct. 6 City and Borough of Juneau municipal election, I am voting no on Proposition 2.

[Voters face a $15 million question]

Proposition 2 adds $15 million more to CBJ’s general obligation debt of $66 million. Over the last half dozen years or so, we have responsibly reduced our bonded indebtedness from a high of $157 million in 2010 to the present general obligation debt of $66,636,500 (as of Sept. 1, 2020).

For this current budget year, CBJ is budgeting $15 million just to pay debt service on principal and interest of past bonds. Passing Proposition 2 adds another $15 million back to this debt and is a huge step backwards, resulting in even larger annual debt payments. Smaller annual debt payments could eventually lead to reduced property taxes and more money in families’ budgets.

As documented by several recent studies, Juneau’s population has been shrinking. Our school enrollment is also down. The 2020 Census will hopefully give us an accurate population count. We do know our cost of living is the highest of Alaska’s three largest cities. We have the most expensive housing, grocery and medical costs for an urban area in the state. Until our economy starts rebounding, we should not take any more money from property owners.

The consequences of voting “yes” would be borne by all of our citizens — families, young entrepreneurs, fixed-income seniors — many of whom do not support and truly cannot afford increased taxes of any size.

Continuing to reduce our debt is the best way to guarantee financial security going forward. It may well be that Juneau’s economic pie gets even smaller, meaning fewer taxpayers will be here to pay for everything we have. Paying off debt opens up the possibility of lowering property taxes — thus making Juneau a more affordable place for families and seniors alike.

Reading Proposition 2 carefully, the major need that stands out are leaky school roofs. In 2017, after hearing from elementary school personnel, the Assembly increased funding for school facility repairs and maintenance to $1 million annually in the sales tax renewal proposal to voters. This sales tax extension passed. Sayéik: Gastineau Elementary is already scheduled in this year’s budget for a roof repair of $1.5 million. Dzantik’i Heeni and Riverbend roofs are estimated at $2.65 million and $2.8 million. Both could be paid now from money already collected from taxpayers.

How much does the CBJ have in reserves and savings? In an Aug. 28 memorandum to the Assembly Finance committee, the year-end restricted ($16.6 million) and unrestricted fund balances ($19.4 million) of the CBJ total an estimated $36 million. The CBJ has readily available cash from its sales tax reserve or its restricted budget savings reserve to pay for school roof repairs without adding a cent to our debt.

In uncertain times, it is an unnecessary step backward to accumulate more debt when we have sufficient funds available.

Stay the course and keep reducing our indebtedness.

Vote no on Prop 2.

Ken Koelsch was a teacher at Juneau-Douglas High School 1969-1996, port director for U.S. Customs and Border Protection 1996-2014, served on the CBJ Assembly 1997-2003 and served as mayor 2016-2018. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire. Have something to say? Here’s how to submit a My Turn or letter.

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