The City and Borough of Juneau’s budget-making process officially kicked off on Wednesday. Over the next few months, the Juneau Assembly will face tough decisions about how to balance a budget that faces a multimillion-dollar hole.
Throughout the next few months, the Assembly will break down the city’s current finances – including the school district, the city-owned hospital, the airport, Eaglecrest Ski Area and Docks and Harbors – to come up with a municipal spending plan beginning July 1.
But this budget cycle may be harder than previous years for the Assembly, as the city faces an estimated $10 to $12 million recurring budget hole due to the tax exemption on food and utilities and the cap on the city’s property tax rate that voters passed last fall.
As proposed, the city manager’s draft $502 million budget doesn’t suggest any major service reductions. That’s because she left those decisions up to the Assembly. In the coming months, the Assembly will be tasked with reducing millions of dollars in spending through cuts to services.
But what and where those cuts will be is still very much up in the air. According to a recent city budget survey, residents chose maintenance of streets, supporting schools and public safety as the city programs and services most important to fund in the budget. On the flip side, respondents said tourism management and visitor infrastructure, climate action and energy efficiency and economic development and workforce support were their lowest priorities for funding.
That survey, and upcoming listening sessions, will help inform the Assembly as it makes budgetary decisions.
The local property tax rate, also known as the mill rate, proposed in the draft budget is 9.92. That .92 is for debt service. The rate abides by the new property tax rate cap voters approved last election of 9 mills excluding debt service, and is lower than last year’s rate.
The mill rate is what the city uses to determine how much residents pay in property taxes each year. The city expects that the lost revenue from the new property tax rate cap will likely be offset by a slight increase in property values this year.
Despite the proposed budgets’ release to the public, its components are expected to change a lot in the coming months as the Assembly begins deliberations. The city will host a listening session at City Hall on Wednesday, April 15, from 5:30 to 7:30 p.m., where residents can share their thoughts about the budget.
The Assembly is expected to approve the final budget by June 15.
Clarification: This story has been updated to reflect that survey results showed residents prioritized road maintenance in general, not just in winter.
