Win Gruening: How to make Juneau less affordable

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By WIN GRUENING

As concern mounted among Juneau citizenry over the community’s rising cost of living, City Manager Rorie Watt initially recommended a lower property tax millage rate of 10.28 for next year’s budget that “generates only enough property tax to pay CBJ general governmental costs after consideration of a $1 million lapse.”

This statement ignores two relevant realities: The City and Borough of Juneau Assembly has earmarked or spent nearly $46 million in public funds to date for the planned construction of two government buildings, rejected by voters, which are estimated to cost around $120 million.

Secondly, property tax assessments this year are rising an average of 16% (though some residents report increases of up to 40%), which negates any purported “reduction” in property taxes by the Assembly.

It is disingenuous to suggest that Juneau’s property taxes cannot be reduced further because “general governmental costs” must be covered after tax revenues have been diverted to discretionary projects. Particularly, when those projects have failed to garner widespread community support and have been turned down by voters. 

 After discussion, the Juneau Assembly approved setting the city’s property tax rate at 10.16. This is, at best, an unconvincing effort to divert attention from an Assembly spending spree that denies taxpayers the relief they need.

The proposed rate reduction is a paltry 3.8% decrease from 2022 when Juneau’s median tax assessed home value had already risen to $527,000 — a 23% increase since 2020. The increase in assessed values without a corresponding reduction in the millage rate translates directly into a higher tax bill for property owners. If viewed honestly, escalating property values over the last two years will cost the average homeowner over $1,000 more in tax annually while the Assembly’s proposed millage rate “reduction” only pares it back a measly $200.

While Juneau’s cost of living continues to outpace larger urban areas in Alaska, city leaders seem determined to drive it even higher with their tax-and-spend appetites. 

Prioritizing the wants of city leaders over the needs of Juneau taxpayers will not expand the community’s tax base which would reduce Juneauites’ individual tax burden by spreading it among more homeowners and businesses.  Indeed, Juneau’s demographics suggest the opposite occurring. The city population is stagnant and school enrollment continues to plummet, placing even more pressure on the municipal budget.

Higher commercial property vacancies in Juneau signal that property owners will be burdened even further. One only needs to roam through the State Office Building to see the empty offices to realize that this will eventually translate to even more vacancies in commercial real estate.

Property owners will also be unavoidably saddled with higher tax bills as a growing number of buildings in Juneau have been purchased by tax-exempt entities and these properties, wholly, or in part, will be removed from the tax rolls, shrinking the tax base even further.

It’s irresponsible to erect new government buildings in this environment and force property taxes even higher to pay for them, without approval by voters of their full cost including any past unapproved appropriations. 

The precipitous rise in property taxes added to other unwarranted Assembly expenditures, is contributing to next year’s record-setting budget, the largest in Juneau’s history.

For example, the Assembly recently made vote-by-mail city elections permanent though the cost to conduct them is significantly higher than conventional in-person elections.  Passed without voter approval, vote-by-mail fails to increase voter turnout, prolongs final election results, and makes fraud and ballot harvesting practices more likely.

While the Assembly continues to promote their “#1 goal of affordable housing,” their actions taken recently directly work against accomplishing that goal.  An unnecessarily high millage rate drives up property taxes and thereby the cost of housing for current and potential homeowners as well as renters. Significantly higher housing costs intensified by budget-busting property tax increases is the single greatest contributor to Juneau’s ever-increasing cost of living.

If the Juneau Assembly is truly interested in more affordable housing and reducing the community’s cost of living, the surest way to accomplish that is through significant spending reductions and a corresponding reduction in property tax.

Is it too much to ask for our Assembly to respect the voters and explore other less expensive alternatives?

After retiring as the senior vice president in charge of business banking for Key Bank in Alaska, Win Gruening became a regular opinion page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations.

21 COMMENTS

  1. Yes, it is too much to ask our Assembly to slow down. They have legacies to build and we must pay for them.

    I disagree we have rejected these morons. Yes, we vote down things like a new palace (err, city hall) and the new JACC, but…

    ….we then turn around and send these idiots back to the Assembly. Therefore telling them we really didn’t mean it when we said no.

    One of our biggest problems is the people who really push this stuff, our “ruling class” families, have enough money to bankrupt most of the borough and still be fine. Doesn’t bother them at all.

    The only ways this ends are:
    -they successfully drive out the middle class and turn us into Elfin Cove.
    -we flat go broke.

    Coin flip where it ends.

  2. How to make Juneau more affordable: build more homes. Very simple. Build some apartment and condo buildings instead of parking lots and suburbs. Or keep cutting property taxes and watch services & maintenance crumble. (But that’s what Win wants.)

      • It is simple. Juneau only allows single-family homes and duplexes in the vast majority of its residential area, which is filled with those kinds of housing already. Properties will be redeveloped where it’s allowed, but if you can’t increase the total number of units through redevelopment (because all you’re allowed to do is replace a single-family home with a duplex, at best) then housing will continue to grow more unaffordable. There are policy changes that would result in a housing boom that they choose to ignore in favor of cutting property taxes, because short-term gains matter to greedy homeowners rather than the health of their city.

  3. Another “home run” assessment by Win Gruening! Every Juneau resident needs to read this THREE TIMES, so there’s no mistaking the message!

  4. “…and makes fraud and ballot harvesting more likely.” Really? Is that why there is the secret ballot counting building on the outskirts of town? Honest elections in Juneau are a thing of the past.

  5. Juneau’s City government is rotten to its very core. The only word the assembly knows is, “Yes!” We all have ringside seats as CBJ creates the perfect environment for huge income disparities. Eventually, only a handful of nice neighborhoods will remain – just the ones far enough away from core services to avoid being invaded by drug addicts and the associated thievery. The CBJ, U.S. Gov., and SEARHC castles with their shimmering facades will shelter the overpaid and underworked elite class, while the average citizen will live in near poverty. Welcome to the Democrat’s utopia.

  6. Win remains conveniently silent on the 10+ Million CBJ is spending on a gondola that it intends to have Goldbelt operate……

      • Thats right but will put the city deeper into the tourist business. As I understand it the city gets a cut of the profits of the downtown tram after a certain point. Also the city leases the waterfront property for only two thousand five hundred a month. A real sweetheart deal. Private tour companies suffer when they have to compete with government for business.

      • From Eaglecrest web site:

        Q: I’ve heard about a $2 million cost and a $7.5 million cost. Which amount is correct?

        $2 million covers the initial purchase, transportation, and preliminary engineering of the Austrian pulse gondola. The funding ordinance currently under review is for this sum.

        $5.5 million covers the cost of installation and additional infrastructure. Eaglecrest may eventually seek this sum as a loan to be paid back by summer operations. This number will be refined in the months ahead as we continue work with the Eaglecrest Board and Eaglecrest Summer Task Force to examine the business case and evaluate future costs.

        • Bob, let’s analyze. The ski facility, including road, is worth over $100-million. The only choices to ameliorate the cash flow subsidy are 1) close the facility or 2) increase the cash flow. However, increasing the cash flow requires investment to make it a year-round operation. It appears the tourist attraction of a summer alpine experience via the gondola will likely create more revenue than the winter operations. We cannot achieve results without risks.

  7. Today is a day for Alaska to celebrate. The Supreme Court ruled against the EPA in Sackett v. Environmental Protection Agency.

  8. Juneau has no interest in affordable housing, families, or anything to make life more appealing and affordable.

  9. Rentals are all filled with seasonal employees then legislation during the winter. The local young family doesn’t stand a chance. I’m suprised the local developers haven’t sold out and left town the amount of red tape they have to cut to build anything. All the low income housing “Wich there is a lot of” is filled with Pacific Islanders and natives generation after generation.

  10. ‘https://www.juneauempire.com/news/goldbelt-to-give-city-10m-for-gondola-project-by-july/

    “Under the revised agreement, Goldbelt is now contracted to contribute $10 million toward the project, which will fund the construction of towers and foundations for the gondola, installing cabling and building a gravel road that follows the gondola alignment and infrastructure for the gondola itself including bottom and top terminals.

    Goldbelt’s financial contribution to this project is in addition to the city’s $2 million already spent on the project before the agreement was made. According to the agreement, Goldbelt must allocate the $10 million in full to the city in one payment.”

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