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Juneau ponders its priorities

MORE CHILD CARE SUPPORT OR STREET CLEANING?

By WIN GRUENING

In what has historically been a rather lackluster and tedious process, this year’s City and Borough of Juneau’s budget cycle has raised a keen level of interest in its outcome.  With further cuts at the state level expected next year and an unsustainable imbalance of expenses and revenues at the local level, our elected officials face tough choices.

It’s not clear where they are headed.

Recognizing the fiscal challenges and the newness of recently elected assembly members, city staff began tackling budget issues by developing a Fiscal Sustainability Process. The goal of the process is for the Finance Committee to provide direction to the city manager in advance of the FY21/22 budget. 

Some major issues at hand include school repairs and debt reimbursement, adding childcare as a significant ongoing expense, and Centennial Hall funding.

So far, the Finance Committee has reviewed the city’s revenue sources and debt capacity, and operating/capital expenditures, program by program – labelling each as mandatory, essential, or discretionary.

At the Nov. 2 meeting, the Finance Committee examined each of the members’ rankings of 80 different programs and projects. (Mandatory, Full Cost Recovery, and Internal Support/Service Programs were not ranked).

Results were mostly what you might expect. Discussion centered around so-called low-priority discretionary expenditures aggregated at the bottom of the list.

Public safety (JPD Patrol) was the highest-rated essential service at #1.  School CIP/Maintenance was the highest-rated CIP project at #10. Transit services were the most valued “discretionary” program at #30.  Ranked in the bottom half were discretionary programs such as those under Parks and Recreation, Eaglecrest Ski Area, and all three public libraries.

A couple surprises were the current $630,000 support for childcare programs at #34 and proposed $1 million in childcare support at #36 – both discretionary – a ranking placing them ahead of essential services like Street Cleaning at #46 and Downtown Parking at #73. 

At least one member commented that after a $400,000 hike in childcare support this year that a $1 million escalation next year was too much and should be scaled back.

Another interesting discussion focused on 23 different “revenue concepts” provided by committee members.  If at least five members favored continuing discussion on an item, it was added to a “Revenue List” for further review. This winnowed the list down to eight ideas (with estimated potential tax revenue).

  1. Additional 1% seasonal sales tax ($6.1 million)
  2. Taxing sales by/to nonprofit organizations ($2.6 million)
  3. Taxing on-board cruise ship sales ($636,000)
  4. Raising property tax by .1 mil ($500,000)
  5. Sales tax holiday – last Sunday in February
  6. Eliminating sales tax on food – offset by 1% seasonal sales tax
  7. Raising sales tax purchase cap/single service cap
  8. Collecting online sales tax ($1.5 – $5.0 million) 

The collection of sales taxes for online purchases may be controversial, but I believe this should be pursued.  Aside from the potential revenue, it helps level the playing field for local businesses that must compete with Internet retail giants.

To this list, I would only add consideration of tribal entities such as Tlingit-Haida Central Council. Currently exempt from collecting sales taxes, their recent new business activity (coffee shops and tourism venues) in Juneau compete directly with local businesses.

Another decision confronting Juneau is what to do about Centennial Hall.  In last month’s election, voters authorized a $7 million bond issue and a 2% hike in bed tax to benefit Centennial Hall. Another $4.5 million in sales taxes had previously been approved.  Together, these funds will pay for the major portion of a recommended $18 million in repairs and upgrades.   This should provide Centennial Hall revenue opportunities and reduce their existing subsidy. The Assembly would be wise to fully utilize these funds as intended.

While actual budget decisions won’t be made until later in the process, this is when ideas and concepts are being formulated.

Assembly members must balance reliance on revenue measures with serious efforts at controlling expenditures. That means not just limiting discussions to cutting low priority items but also delivering services more efficiently and monitoring whether results are being achieved.  This is particularly true with spending on schools and social services like childcare.

These issues raise tough questions – and even tougher choices to make.

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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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Why 3 Public Libraries in Juneau ?? Seems to me 2 should be enough.

  • It is a good thing that the city of Juneau does not elect our Governor. We would not be cutting the state budget with Mark Begich as Governor. Liberalism has been flourishing in Juneau for decades. Their affinity for taxes is continuing to grow and with it, individual freedoms will continue to diminish.

  • In answer to Win’s question, actually the answer where Juneau is going with the municipal budget is actually quite clear. We will adopt an extravagant and unsustainable budget.
    Juneau’s elected and senior appointed officials lack the combination of will and in some instances the skill to adopt a sensible and sustainable budget.
    Oh well ……….

  • Juneau’s milking of the whole of the Legislature’s industry & 1/3 of the executive offices & housing of the state makes its existence a culture of excessive spending… sooner or later they will sink in the quicksand of corruption just like Rome!

  • The measure to maintain the current budgets and new “wants” does not contain any cuts to staff or departments. Not a surprise because for our government ‘bean counters”, only tax increases will fix a problem. Schools, the heart-tugging first shot” of the ruling class administration, the answer is to increase funding to our kids. It’s a school saying, our union teachers and local building contractors need more money. We have beautiful buildings and impressive-sounding programs that our parents support because boundary schools don’t meet the needs of our parents. Maybe it’s time to move the operation of public schools to the private sector and get the government out of the process. The private sector couldn’t do any worst than our union led the present staff. Also, the list of fixes was all tax increases. Way to go, JUNEAU, YOU HAVE BEEN INDOCTRINATED WELL. Believe it or not, STAFF AND PROGRAM CUTS are a way to balance a budget, but not a one is on your list. What you are is saying is EVERYTHING WE DO IS VITAL TO JUNEAU’S FUTURE. I attended a statewide meeting of local city and borough staff recently. At one session chared by the assn.staff, they posed a question on 50 some-odd bills in session in Juneau. They summarized the law, and we asked us to vote in favor or not on passage. ANY BILL WITH A TAX INCREASE PASSED THE MEMBERSHIP WITH A 60 % MARGIN. THESE MEMBERS WERE EMPLOYEES of some city or borough government. YOUR PROBLEM IS AT HOME AS WELL AS JUNEAU.

  • Glad to see that some recognition is given to tribal business exemption from state and municipal taxation. CBJ expressed no opposition to the exemption of taxation AND regulation of Central Council lands when CBJ in letter of June 6, 2017, did not oppose Central Council’s application to BIA for federal “Indian country” status on three small lots in downtown Juneau.

  • The priority must remain Getting Money!
    .
    The only question should be how to force: an additional 2% seasonal sales tax ($12.2 million), so sales by/to nonprofit organizations won’t have to be taxed, doubling the proposed on-board cruise ship sales ($1,272,000), raising property tax by a mere .15 mil ($750,000), eliminating the sales tax purchase cap/single service cap, doubling the proposed online sales tax ($3 – $10 million).
    .
    Sure, a few numbers were changed just a little, but everybody must be forced to pay their fair share, right? Add the numbers, Juneau’s cottage industry could get around $24 million!
    .
    Bottom line, if government is your cottage industry, what props up your economy, you gotta Get Lots Of Money to feed and grow your government or, just like any other invasive species, it’ll wither and die and take your economy with it.
    .
    So, Juneau persons, get busy, support and grow your local government like you’re supposed to do.

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