CBJ Budget

The CBJ’s finance experts are projecting multi-million dollar budget shortfalls in upcoming fiscal years. How would you address the shortfalls?

Which city services are your priorities to maintain?

The challenges with the city budget are large, but they also present opportunities. My basic wheelhouse is one of a practical problem solver. If it’s a complicated problem, people give it to me to help solve. So, it happens to be a thing that I’m actually quite good at. I look forward to looking at the budget line by line, finding places that there can be efficiencies.

So, first we have to spend what we have well. We also have to look at where the revenues are, for example sales tax exemptions. We have $25 million of exemptions on the books. We need to look at that as a whole package and see where we can find new revenues. For example, one of the ones is, there’s a $7,500 cap on sales tax put in place years ago for, particularly, to encourage automobiles to be sold here. That’s now being used for that, but as well as for jewelry stores are using that exemption. Even if we just went with inflation, it would be up to $12,000 or $14,000 – those kinds of things. There is no silver bullet. It’s going to take small pieces all over the place and that’s one example.

By the same token, we can’t cut our way to a vital community. We have to look for ways to grow our economy. We have to make sure we’re the best capital city. We have to continue to fight capital creep. Those are good high-paying jobs that we need to keep in this community. Same thing with the federal – I know the federal government is cutting. We need to bring Alaska’s fisheries jobs back here, research jobs that are for Alaska’s fisheries here. Each of those things are pieces of the puzzle that we need to pursue vigorously.

Education is a vital piece of our community. People want to live here when they can educate their kids well. It just should be done and it’s also good for economic development. If a business is to locate here, they want to know that their kids get a good education, so that is a high priority to maintain that funding, is education. And, of course, police and fire – the basic city services – streets, maintenance, sewer, water – those are vital to keep the community a livable place and to keep people wanting to live here.

The budget issues are very real and very important. The city manager and the Assembly have been working to reduce the deficit. It’s important that we follow through with the economic plan. We need to revisit the economic plan regularly to keep us moving forward. We must deal with our community budget shortfall so that we can continue to maintain our quality of life.

I need the details of the financial reports that have been provided to the Assembly before I can offer any specific solutions. I would continue to communicate with the public and seek their input in order to help find solutions. The last McDowell Group survey showed clearly that the public does not want increased taxes or fees and that the Assembly needs to keep this in mind as it develops solutions to the budget problems. I can make hard decisions, but I want to make sure that I have all of the information before adopting a solution. I will also read all of my Assembly information before the meetings so that I’m prepared to make those decisions.

There’s basically three ways that you could address budget shortfalls. You can increase revenues through taxation and that sort of thing. You can cut spending and government services which is a reduction in the scope of services overall. Or, you can stimulate growth that, by itself, brings in more revenues to the City by making more properties available, new properties that add to the tax rolls. Those kinds of things.

If I was elected, I would basically be the only person on the Assembly from the private sector. My natural predilection is to allow market forces and growth to allow the funds coming into the Borough to help stabilize the imbalance in revenues and expenditures. That said, I would liken the situation to something that actually I heard on KTOO a couple of days ago was that there isn’t really a magic bullet, but there’s going to be a thousand BBs. I think at the end of the day, the Assembly is going to have to get together and reach consensus on a wide range of efforts. That’s what they did last year and I think that’s what we’re going to have to do this year. We’re going to have to look at short-term, mid-term, and long-term ways to bring that into alignment. The truth is, I think in the short-term, we’re going to have to use some of the budget reserves. I don’t see how we get around that. There may be some additional revenues to be found by increasing the price of certain services or outside the basic services of government. But you have to realize that really our fundamental needs are to meet the demands for water, for sewer, for transportation, for fire, and for police. As a Borough, those are our fundamental needs and we need to meet those.

A lot of the other services that we have here in Juneau are the things that make Juneau a wonderful place to live. But, given that the number of good high-paying jobs in State and Federal government are decreasing, and they’re being replaced with jobs that have less disposable income than these other jobs, we need to look at the fact that maybe Juneau is changing and realign our expectations with what the realities are. That’s why I like the idea of really emphasizing growth and, in particular, growth in jobs that will bring more disposable income. A good example would be if we could capture some of the folks that work at the Kensington and the Greens Creek (mines) that live outside of Juneau. If it’s possible with a carrot and stick approach to make them more open to the idea of settling in Juneau itself, then you’re hopefully capturing more of the disposable income from those folks and that could help with the imbalance as well.

The budget is probably my number one priority going forward into another term. We have done a lot of cutting at CBJ. We have wrung the efficiencies that we can out of this budget in most every place we’ve looked, and we’ve started reducing services. I think there are additional services we may end up reducing, but we’re getting close to a point where people are going to notice the impacts on the quality of life in Juneau, the things that attract people to and keep people in our community. And that’s going to be a problem in the long term.

So we have looked and we will continue to look at where we spend. We now need to look at how we put together our revenues. There are places where the growth that’s good for our community, the growth that’s good for our economy, is not paying its own way in terms of the city services that we need. Maybe the best example would be that the growth in the senior citizen population is good for Juneau. It’s good for volunteerism, it’s good for families, it’s good for the arts, and it’s good for our culture as a whole. As soon as a resident hits 65 on average half the value of their house is tax free, and their sales are tax free. But the ambulance still has to come just as fast when they call 911 as when a young newlywed in town calls 911. They still want to use a pool, just like young kids want to use a pool.

So we need to look carefully, very carefully, so that we aren’t pricing either group out of Juneau – working people or seniors. They both bring a tremendous amount to our community and to our economy. We need to make sure that as the community grows as whole, that growth also funds the public services that we’re demanding as Juneau citizens. The city right now is involved in looking at all of our tax exemptions. And there are quite a few of them, both on the sales and property sides. So we are looking thoroughly and thoughtfully at what positive impacts those tax exemptions have, and how much they’re costing us. And so at some point – and I’m sure it will be after the election – but at some point the Assembly is going to need to make choices about whether we can afford to continue them all as they are now.

I can tell you, I’ll guarantee you we’re going to make at least one change in the senior sales tax exemption. There are 13,000 senior sales tax exemption cards out there right now. We know there aren’t 13,000 seniors eligible. So we need to get a handle on that program in some way, whether we change the rules or not. Again, when we look at those rules we need to look very carefully and make sure we’re not pricing seniors out of town. But that we’re also raising the revenue we need so that the ambulance does come when you call it.

The priorities of the City and Borough of Juneau are education and public safety. Public safety being our police department, fire department, roads, water and sewer. Everything beyond that are services that the Assembly has been tasked with providing, be it through lobbying, or through voting on tax measures. Moving forward, we need to look at every revenue and every expenditure, and I’m hoping that my experience in the private sector where budgeting is a much different process will come in handy through this process. Under no circumstances, should we reduce public safety budgets. Everything else has to be on the table.

The city needs to maintain its emergency services and its fully funding of schools. Those are the two top priorities the city should have. I think recreation needs to be able to fund itself better, not in the black but a lot closer. I think we need to look at more revenue generation instead of cutting city services.

Well, I think that the budget definitely needs to be as close to balanced as it can be. You can’t sustain a community with a budget shortfall for very long. So we would need to look at finding ways to cut the budget. But also, look into generating new revenue streams.

There’re certain things that the city absolutely has to have, like a fire department, police force. And those, you can’t cut anything from the essential services. But there may be other ways to cut the budget. I would have to look at the specific numbers before I could make any kind of determination.

An equipment malfunction resulted in no audio for this question. In place of the transcript, this is Fox’s response according to the reporter’s notes.

Fox says the city should maintain what it has, look for efficiencies and avoid expanding. He says the city needs more revenue, too, and it could come from attracting more young professionals to Juneau.