Juneau Assembly hears latest budget forecast

Seven-point-eight million dollars… That’s the latest two-year budget deficit forecast for the City and Borough of Juneau by Finance Director Craig Duncan.

It hasn’t changed much since the last projection Duncan gave the CBJ Assembly more than a year ago. In December 2010, he predicted the city would be facing a 7.5-million dollar shortfall, spread across fiscal years 2013 and 2014.

As KTOO previously reported, Duncan says much of the shortfall will come from losses in federal funding and lower than expected returns on the city’s investments. But he admits a lot is still unknown right now, three months before the assembly starts crafting the biennial budget.

“We do know some more now, but certainly there’s a lot to go through still before we actually get the budget process in April,” Duncan said during his annual presentation on the city budget to the Assembly Finance Committee last night (Wednesday).

City Manager Rod Swope, who’s job it is to craft a proposed budget for the assembly to start with, also sounded a note of caution. Two years ago, when the assembly was crafting the budgets for fiscal years 2011 and 2012, the forecast was for a deficit of about 8-million. But in the last two years the city hasn’t seen anywhere near that level of shortfall.

“We ended up cutting about $4.5-, $5-million, and then you assisted us with some tobacco tax and also gave us the opportunity to use money from the budget reserve, which it turns out we didn’t have to use the majority of that,” Swope said. “But I think at least in the last two to three years, even though we were projecting things and we did have some windfalls, we haven’t grown. And I think staffing levels – if you look in the budget book – staffing levels and budgets will verify that. We really haven’t increased at all.”

The Finance Committee, which includes every member of the assembly, scheduled two meetings for February. The committee typically starts hearing budget requests from individual city departments in April. The full assembly has until June 15th to approve the final two-year budget, but it sometimes finishes that process in May.

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