By WIN GRUENING
Last week, during a scheduled Juneau City and Borough Assembly Finance Committee meeting, City and Borough of Juneau staff introduced the FY2024 draft budget for consideration. This was the first of many meetings examining the budget prior to final Finance Committee action on May 17 and adoption by the full Assembly on June 12th. In conjunction with the budget, the FY2024 millage rate and Capital Improvement Plan budget will also be adopted.
According to the City Manager’s Budget Message accompanying the presentation, the FY24 budget will break new ground with higher revenues and expenses than in any prior year in Juneau’s history.
Without question, impacts of continued inflation and lingering effects of the pandemic have contributed to a higher budget, but Assembly actions have also been a crucial factor.
Recurring FY24 expenditures are expected to grow by nearly $10.6 million over FY23. That increase is offset by revenues but doesn’t include $16.0 million of one-time spending, to be funded from the city’s unrestricted fund balance. That one-time expense includes $10 million for a proposed new city hall, bringing the total amount already appropriated for that project to $16.3 million.
The City Manager states a new city hall will substantially reduce CBJ’s long-term operating costs. He contends that current office space conditions are unacceptable and that the city’s continued rental of space is an inefficient use of the public dollar.
Yet, a bond issue for $35 million to partially pay for that project was turned down by voters last October. While that election wasn’t a yes/no vote on the City Hall project, per se, it was a pretty good indication that voters either don’t want to pay for it or that they believe there are better, less expensive options than new construction.
The CBJ Assembly, however, has taken the position that the electorate just doesn’t understand the benefits of a new city hall, so they are plowing ahead with the plan anyway and intend to spend $50,000 on a public campaign to “educate” voters.
Regardless of the fiscal gymnastics, whether the city pays cash or borrows the money, the full costs (both capital and operating) will be borne by taxpayers. It seems like the Assembly should be listening more closely to them. It’s not as if voters don’t believe city employees should have decent working conditions. Or, in the case of the proposed $75 million Capital Civic Center project, that arts and culture doesn’t play an important part in the quality of life in the community. Most voters do believe that.
But Juneau’s cost of living is also an integral and vital component of quality of life. Public projects that have indeterminate recurring costs and one-time expenditures that have outsize impacts on the budget must be balanced against the need to keep basic living expenses low. Food and housing prices and taxes need to be within a range that encourages economic development and attracts new residents, thereby allowing the tax base to grow organically.
Unfortunately, Juneau’s demographic trends are working against this. With school-age and working-age population dwindling, required taxes will continue to increase at the individual level making it even more expensive to live in Juneau.
A look at the latest increase in Juneau’s residential property tax assessments shows how this is beginning to play out. 2023 assessments increased nearly 16% for single-family homes. In response, the City Manager has recommended a reduction in the millage rate of .28 mills, from 10.56 to 10.28. Any reduction is welcome, but that is trivial in comparison to the increase in city revenue. For example, if a property assessment went from $475,000 to $550,000, the owner will pay, and the city will gain, an additional $638 in taxes next year. That is only $154 less than would be paid without the millage rate reduction – less than a quarter of what the city gains through increased valuation.
In other words, the proposed millage rate decrease is minor compared to what property owners will shell out and the city collects in increased taxes. That difference is what is funding the 2023 budget increase.
But the city can claim it is “reducing taxes” and the budget is “balanced.”
You be the judge.
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.
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As long as we keep electing the same fools into the Assembly, we are giving permission for them to rob us of our money and our future.
This particular group has no vision for the future outside of feathering their own nests and those of the people they really represent.
If we keep on this path, we’re gonna die a slow death. In another generation we’re gonna be Petersburg. If we’re lucky.
Easily the most incompetent and dishonest city government in Alaska! Juneau has fewer high school students than it had when it had but one high school building, but they say that the BSA subsidizes extra buildings and that Juneau would therefore lose $300,000 a year net of all costs if it closed one of the buildings. Likewise, there is at least one too many grade schools but the Assembly says closing one would cost $60,000 a year in BSA net profits to Juneau and it would put pressure on the city to turn a close grade school into a city hall (rather than building a new downtown office building which the city manager prefers). Yes, this is the city that took federal relief money and gave it to “teach drag queen lessons.” Alaskans have every right to ask if this is the right city government to be entrusted with the state capital.
In my experience the communists who run Juneau, where I lived for twenty-odd years, are more realistic and responsible than the communists who run Anchorage. At least some of those in JNU have some idea how to run a goveernment agency. Here in ANC, the MOA is just a social club for people with good lefty connections.
Also as small as we are, it’s a whole lot easier to let your displeasure be known.
But we have a new gondola going in at eaglecrest….
Let them pay. Juneau wants the Capitol so bad then pay for it.
Mark,
Trust me, people in Juneau pay an enormous sum to retain the Capitol. From owning and operating their Airport to providing free covered parking for Legislative staffers.
Mark: Plenty of us Juneauites would rather see the Capitol moved. Personally, I’d like to see it moved and the further away the better.
We pay is so many ways.
Feel free to take it off our hands anytime.
We voted to move the capitol but it never moved. If Juneau did not want it they should start a movement to move the capitol. The BP building is empty and could be a great building to put the politicians in.
There is a ton of money flowing into Juneau right now. We have new construction everywhere, both residential and commercial. Where is all the money coming from? I imagine a good portion is from the Biden Inflation Expansion Act. Lots of federal dollars and the native corporations are worth billions so who knows.
Win,
I recall a story that Wayne Johnson told me once, years ago. Wayne at one point in time was Mayor of Juneau, later his cousin ( or was it his nephew?) Bill Overstreet was Mayor. When Bill was Mayor Wayne noticed that his Tax Bill was steadily headed North.
Wayne met with Bill and said Damn it Bill, what’s with all these taxes and spending? When I was Mayor folks would come to the Council Meetings and raise Hell about this kind of thing!
Bill smiled and threw up his hands and said, ” Wayne , nowdays they throttle the Council Chambers and Demand that we spend more money”.
Wayne, an old school Okie Democrat couldn’t understand how it was that folks in Juneau ever got so stupid.
It’s actually simple. He was a Democrat.
These days, the old democrats are the alleged Republican Party and the socialists are the New Democrats.
There is very little place for conservatives or fiscally conservative Democrats in today’s America.
And now, our old friend Alyse wants a statewide income tax. “Only on rich people” Deja moo!We have heard that bull before
Until Juneau voters wise up and support a blanket recall of every Assembly member who continually abuses their authority by appropriating public money for issues voted down by taxpayer residents, they are going to continue to get away with what they’ve been doing. They passed mail-in voting (not a decision by voters) for a reason, they control the ballot count, and “magically” remain in office, (though you can’t find anyone on the street who admits to voting for them). When the mail-in ballot count became questioned, CBJ sent them to Anchorage (of all places?) to be tallied. Magically, if not predictably, everyone retained their slots on the Assembly! DUH?!
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