City officials in Juneau have proposed a municipal spending plan for next year that slightly raises the property tax rate to balance out the costs of taking over closing school buildings and maintaining current city services.
On Saturday, the Juneau Assembly met for a day-long meeting to begin building the framework for next year’s $440 million budget. The meeting was just the first of many before the budget will be finalized in June.
This year, property values have gone up in Juneau, but not nearly as much as last year. Both residential and commercial property assessments rose by less than 2% on average.
City Manager Katie Koester proposed a property tax rate for next year of 10.32 — a slight bump from last year. She said that an increase is needed to balance the cost of the city taking over the school buildings that will close under the school district’s consolidation plan.
“We’ve worked really hard to maintain Assembly direction and have a flat mill rate, 10.16. We got a little gift late in the game with those three facilities, and that is the mill rate increase from 10.16 to 10.32. It really represents that,” she said.
Some Assembly members, including Mayor Beth Weldon, said they’d still like to see the rate stay flat. But that could mean cutting some services or using savings.
“I’m hoping, between filling those buildings and some creative pencil sharpening of the Assembly, we can bring that back down to 10.16,” she said.
Each year the city budgets funds for things like schools, the city-owned hospital, the airport, Eaglecrest Ski Area and Docks and Harbors. This year’s budget essentially maintains the status quo — it isn’t cutting or adding any major services. But the Assembly does face some looming problems.
Bartlett Regional Hospital’s proposed budget for this year projects a loss of $7.5 million. That budget dips into the hospital’s savings this year to cover the loss, but it can’t sustain that for much longer. If the hospital can’t cut costs enough, the hospital’s CFO Joe Wanner says it will essentially be out of money within the next three years.
Bartlett interim CEO Ian Worden said these decisions won’t come easily for the Assembly or the public.
“We’re in a very difficult position, and I think programmatic closure is not out of the realm of what most hospitals are doing these days,” he said.
Assembly member Alicia Hughes-Skandijs said making those major decisions doesn’t feel feasible during this budget cycle, but she thinks they will have to happen in the next year.
Eaglecrest Ski Area is also facing a deficit heading into the budget process — more than $415,000 — due to rising costs, the effects of climate change, and a tight job market.
At the meeting, Eaglecrest Manager Dave Scanlan said the ski area is seeking a five-year loan of nearly $900,000. He said that would address the deficit and help prepare for the summer season and the addition of a used gondola.
“We need to build staffing capacity,” he said. “It will help cover this bridge between where we’re at right now and where we’re going to get to as we open the gondola.”
It’s not clear yet whether the city will grant the loan. But it does plan to fund the Juneau School District as much as the state allows, as it has in years past. Along with taking over the buildings that will close, the city is also covering $1.6 million in “shared services” and giving $2.45 million in outside-the-cap funding.
