Hiking taxes in Juneau comes with a price




For any organization, goalsetting is important. Thus, every year during its annual retreat, our City and Borough of Juneau Assembly sets community goals. Last December, the Assembly finalized these priorities for 2018. The 24 adopted goals were grouped into four subject areas: Housing, Economic Development, Sustainable Budget and Public Safety.

Goalsetting fosters thoughtful discussion and consensus and lays the groundwork for the Assembly’s workplan. City staff then formulates ideas and thoroughly vets proposals that further these goals before any formal action is taken.

So, what happened between December and July?

We are more than halfway through 2018. Rather than focus on the majority of agreed-upon priorities, some members of the Assembly, and perhaps city staff, seem fixated on two new proposals being promoted by single-interest groups.

Under consideration for inclusion on the October ballot, these two items will dramatically impact CBJ’s “sustainable budget” goal by spending $12 million toward construction of a new Juneau Arts & Cultural Center — named the “New JACC” — and up to $2.8 million annually to operate a child care/kindergarten readiness program called “Best Starts.”

As I’ve written in past columns, the New JACC proposal is problematic on several fronts. Juneau’s current demographics (shrinking population, job losses, and stagnant economy) don’t support a $32 million cultural facility (plus unspecified millions of dollars for a parking structure).

When initially proposed, supporters stated public funding wouldn’t be required, and the sponsoring organization, the Juneau Arts and Humanities Council (JAHC), would be responsible for operational expenses. As it became clear that wouldn’t be possible, JACC promoters now want taxpayers to shoulder almost half the construction cost and take financial responsibility for operating shortfalls.

The New JACC request is accompanied by a slick, emotional campaign about the importance of the arts but is missing an updated in-depth study of potential revenues and expenses. The objective seems to be to get it on the ballot quickly before anyone can question the project’s feasibility.

There’s been no serious effort to verify supporters’ economic argument that the New JACC would be self-supporting — raising the specter the city would be saddled with another operational subsidy adding to the existing $600,000 loss incurred each year by Centennial Hall.

How is it that this project magically appeared as a pressing priority when it’s not mentioned in any of the Assembly’s goals? Does it really deserve $12 million in bond funding to be repaid through sales tax, property tax, and increased hotel/motel tax?

The Best Starts proposal does fall under an Assembly goal of improving Juneau’s Next Generation Workforce by supporting continued education funding, and child care with an emphasis on kindergarten readiness.

But it should be noted when this proposal was brought before the Assembly during budget hearings, it was declined due to lack of a funding source. Its supporters then proposed putting it on the ballot for a vote to be paid through an increase in property taxes.

Both the New JACC proposal and Best Starts, if passed by voters, will likely divert funding and attention from public safety — such as additional police officers or paramedics – and other more important goals on the Assembly’s priority list.

Increasing property taxes will make housing less affordable and economic development less viable.

Raising the hotel/motel tax (making Juneau’s visitor tax burden among the highest in the state) will make Juneau a less attractive destination for conventions and independent tourism.

Using limited sales tax dollars to support either of these projects will arguably reduce available funding for necessary infrastructure projects like the Juneau Airport remodel and water/sewer utility upgrades. This would hobble improvements in the city’s deferred maintenance/asset management long term plan — another higher priority goal of the Assembly.

The New JACC and Best Starts projects, regardless of how public-spirited they may be, cannot be considered in a vacuum.

It is the Assembly’s responsibility to act in a non-emotional, measured way that honors adopted goals and the basic purpose of municipal government — which is not to satisfy everyone’s “wants” but to provide true needs.

Without all the facts, along with independent and credible feasibility analyses of these projects, acceding to pleas that these tough decisions be shifted to the ballot is an abdication of that responsibility.

Win Gruening retired as the senior vice president in charge of business banking for Key Bank in 2012. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is active in community affairs as a 30-plus year member of Juneau Downtown Rotary Club and has been involved in various local and statewide organizations.