Is this the right time to JACC up taxes? - Must Read Alaska
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Thursday, September 19, 2019
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Is this the right time to JACC up taxes?

By WIN GRUENING

During recent deliberations, Juneau Assembly members reviewed a list of pending projects that have been submitted for financial support in the near term.

City Finance Director, Bob Bartholomew, outlined one-time capital improvement and grant requests totaling between $34 million and $85 million depending on how the state budget picture finally shakes out, as well as a $5 million hit to CBJ’s annual operating budget that needs to be addressed.

Most Alaskans are focused on state budget battles, so it’s easy to lose sight of the impacts on municipal budgets downstream.  Indeed, our local governments should proceed cautiously before making any large new non-essential financial commitments. No one knows what the new budget landscape will look like, but our city leaders should be prepared to deal with a range of scenarios.

This set of circumstances has highlighted the amply publicized new Juneau Arts and Culture Center which has formally requested a $7.5 million grant from the city – to be funded by transferring $4.5 million in sales tax proceeds previously approved for Centennial Hall convention center and adding $3 million from undesignated sales tax revenues. This is in addition to a 2012 $1 million city grant and the donation of city land for the site in the Aak’w Village District.

Proposed originally as an $18 million joint venture between Perseverance Theater and the Juneau Arts and Humanities Council – not needing further public financial support – the project has ballooned in cost, and now requires a substantial infusion of public money.   Here is why:

  • In 2015, Perseverance Theatre withdrew from the partnership citing financial constraints.
  • In 2018, a $12 million general obligation bond proposal for the project failed to pass the Assembly.
  • After several years of fundraising, the project (re-labelled the New JACC) failed to attract enough donations and has only managed to raise $5.5 million, 21% of the now increased $26.4 million cost.

Now, New JACC backers insist the city provide $7.5 million to add to existing donations thereby demonstrating to potential donors a 50% local commitment towards the estimated cost.

The question remains. In these uncertain times, should government expend precious dollars on (or raise taxes to fund) non-essential proposals when it’s clear there are major financial obligations looming that take priority?

Aside from the New JACC, the largest immediate expenditures facing the city are necessary major school maintenance costs (mostly school roof replacements) ranging between $11 million and $46 million and Centennial Hall upgrades of between $5 million and $10 million.

Bartholomew also presented a list of possible ways to pay for some of this.  Unfortunately, very little of it would come from budget reductions. Most of it would presumably come from four main areas:

  • Surplus sales tax revenues over 4 years ($4 million)
  • Depletion of reserves ($4 million)
  • Hotel tax hike of 5% ($12.5 million)
  • Expansion of municipal debt repaid through property taxes ($28 million)

Despite the enormity and uncertainty of potential budget hits and how they would be funded, the Juneau Assembly introduced several ordinances this past week – possibly granting up to $7.5 million for the New JACC and authorizing up to $10 million in a 15-year general obligation bond for Centennial Hall.  Also introduced was a companion ordinance hiking the hotel/motel tax by two percent to partially offset costs of Centennial Hall improvements.

[Read: Connecting the dots between Juneau’s economy and Juneau’s needs]

These preliminary measures, in their final form, are scheduled for a public hearing and Assembly approval on August 19.  The bond proposition and the hotel/motel tax increase must be approved by Juneau voters.  An advisory vote on the New JACC funding would also be on the same ballot in October.

The Assembly apparently thinks it prudent to commit substantial funds to a new performing arts center before concerning itself with the possible need to fix leaky school roofs.

The vast amount of time the Assembly and city staff have invested in placating New JACC proponents has detracted from serious economic development efforts needed to grow Juneau’s population and job base.

How will increasing sales or property taxes or raising taxes on independent visitors improve Juneau’s economy in the future?

Whether the Assembly’s priorities match those of Juneau voters in October remains to be seen.

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.

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  • So we’re on the verge of major budget reshuffling and Juneau wants to add new projects as well. No wonder people want to see budget/government cuts or downsizing. This is nuts. Doesn’t leave much faith in the elected & appointed officials in charge of the stewardship of public funds.

  • Juneau should realize that there’s people like me gathering signatures to move the legislature to Anchorage.
    On the west coast of Alaska, that’s a no brainier and an easy sell.

  • The prescription for disaster. That’s what the Juneau assembly is wanting to implement. Don’t perform maintenance/repairs on existing infrastructure. Build new unneeded, enormously expensive ‘public’ facilities and let the rest go to hell. Typical leftist/wingnut ‘management’ philosophy. Juneau residents, you put these fools in office. The onus is on your shoulders to fix the problems. That’s pretty much a no brainer. Get rid of the irresponsible, inane management of your ‘fair’ city. The ‘new’ taxes and increases to existing taxes is the M.O. for leftists. Only you can fix it. Even if the assembly institutes the new ‘revenue’ streams to further fleece tourists and residents alike, it’s only a matter of (short) time before the new ‘revenue’ streams are not enough. What then Juneau citizens? More and higher taxes? How much can you afford to fulfill the wants and wishes of the leftists running your community? You can be sure that any ‘public’ employees won’t feel the burden. They’ll get a raise to cover the ‘new costs of living’ in Juneau. Anyone else won’t.

    • As usual Ben, you are missing the point here. Win has given his reasonings for not supporting such a proposal but it’s not as if the Juneau assembly is wanting to implement this.
      It’s just a proposal! Got it??

      • Bill,
        As usual, you have missed the ‘point’. The Juneau assembly introduced ordinances to make it happen. Read the article. All it takes now is a kangaroo court “public hearing” and a vote of the leftist assembly to make it happen. Don’t you think it will happen? I do.

        • Ben, where do you come off with Juneau having a leftist assembly? Granted there are some that would like to see JACC but merely introducing a proposal doesn’t “make it happen.” And that you think it will happen hardly means that it will.
          Anyway, proposals that don’t go anywhere are introduced all the time. At present there are also some who want a new CBJ building on top of downtown parking garage that may/may not happen too.

          • Bill,
            I ‘come off’ with common sense. Use your head, man. The issue may/probably will go to a ‘vote’ but there aren’t enough conservatives in Juneau to vote the measure down. The same leftist that put the assembly in office will make sure the ‘vote’ goes their way. One thing you have to give leftists. They stick together and support any leftist scheme presented.

          • Ben, while you seem to think it’s common sense here is Juneau mayor response to this JACC proposal: http://www.kinyradio.com/news/news-of-the-north/mayor-weldon-spells-out-preferences-for-centennial-hall-and-jacc-funding/
            By-the-way, she is no leftist and this advisory vote will resonate with assembly IMO. This vote is hardly a conservative/liberal thing as folks will be voting their pocketbook and a lot of pocketbooks are shrinking these days. And you probably don’t consider me a conservative but I intend to vote against this.

  • Juneau is a remote cesspool responsible for bad outcomes. I’m okay keeping the capitol there but not okay sending our elected officials to that remote retreat to get worked over by lobbyists and state workers. There is no greater problem in the state. It is a major contributing factor to our present situation.

    • Try electing better officials who can stand up to lobbyists who will move to wherever retreat is presented them, ERAK.
      Of course, having your reps. show up at some place, other than the capital, makes no sense as it’s those in the capital who are necessary to government getting its job done. But then, that could just be your intent, here right?

      • Nothing personal Bill, but the harm to the SOA from the legislature meeting in a remote location offsets the hit to your Juneau real estate by a factor thousands, maybe millions.

        How about moving it back to Sitka. You okay with that?

        • What would be the point? You aren’t making any sense. Your point, I thought, was that somehow Juneau allowed unnecessary clout to lobbyists and State workers but you are giving too much credit here to these lobbyists and not enough to Representatives.
          Your turn.

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