Property taxes could go up for most Juneau residents. That’s if the Juneau Assembly moves forward with a plan to increase the rate it uses to calculate them in the next fiscal year.
That’s as the city’s budgeting season is wrapping up. Over the last few months, Assembly members have been deliberating how the city should best use the money it takes in from its residents.
At a finance committee meeting Wednesday night, Assembly member Wade Bryson said he thinks some residents aren’t exactly pleased with how it’s going.
“I don’t know if anybody’s paid attention, but the community is not at the happiest with us right now,” he said.
That’s at least in part because of the proposal to increase the property tax rate by quite a bit. The current rate is at a historic low of 10.04.
Property taxes help pay for a lot of bread-and-butter services and make up roughly 40% of the city’s general fund revenue. Property tax bills are calculated by multiplying the mill rate by a property’s value. This year, the average residential property assessments rose by less than 1%.
Essentially, if the mill rate goes up and property value does too, you’re most likely going to see a higher property tax bill. In contrast, even if the mill rate goes up, but your property value goes down enough, you may not see much of a difference.
But lower property taxes mean the city has less money to work with and the Assembly has to decide whether to cut certain services or dip into savings to keep the city government running over the next year.
That’s what the Assembly is facing right now. Throughout the budget cycle, they chose to tack on extra costs to the budget. As City Finance Director Angie Flick explained at the meeting, that means the budget is no longer balanced.
“We just do the math on the items that the Assembly has added that are recurring to the budget already, that would require a mill rate of 10.44,” she said.
Some Assembly members, like Bryson, argued that bumping it up that high would make people even more upset with the Assembly than he thinks they already are.
He pointed to a new Juneau advocacy group called the Affordable Juneau Coalition, which is currently collecting signatures to cap the property tax rate at 9 mills. If approved, that would cut a sizable chunk of the city’s annual revenue.
“We raise it tonight, while they’re gathering signatures to lower our tax rate, we absolutely will be looking at those guys being victorious. They’ll get their signatures,” he said. “I don’t think that we should do anything more to enrage the community.”
However, other Assembly members like Ella Adkison advocated for a higher rate because she wants to see the city’s budget balanced amid federal uncertainty.
“I think that having a budget that we are safe in is most important right now, because we really can’t predict the future, and so I think this is the most responsible move we can have,” she said.
After a bit of back and forth, members landed on a mill rate of 10.24, which would split the difference between last year’s rate and the rate they need to balance the budget. So, for a typical $500,000 home in Juneau, the annual property tax bill works out to about $5,120.
But that rate would mean they’ll need to dip into the city’s savings. Assembly member Alicia Hughes-Skandijs did not like that idea, but reluctantly agreed to move forward with it for now.
“That just can’t be our budgetary process to hope that we’re going to be saved by our historically large reserve fund and hoping things go our way,” she said.
The Assembly will still need to take public testimony on the rate and finalize the budget. That’s expected to happen on Monday, June 9, before the fiscal year begins on July 1.
