CBJ Assembly gives direction for closing budget gap
The City and Borough of Juneau’s budget will be balanced without layoffs or major new cuts to services.
As KTOO reported yesterday, that was the direction the Assembly Finance Committee gave to City Manager Rod Swope and manager-in-waiting Kim Kiefer this week.
The manager’s office now has a little less than a month to bring a proposed budget to the Assembly. Casey Kelly has more.
Assemblywoman Karen Crane says making additional operating and personnel cuts to balance Juneau’s budget was not a good option.
“You have to understand that the city manager has already cut, and what we have left is a bit over $4-million,” Crane says. “And so, we would be cutting down to the bone in some departments and we would be looking at employee layoffs and reductions in services.”
Crane chairs the Assembly Finance Committee, which directed the manager’s office to close the remaining budget gap using some combination of the following: One-time money not to exceed $1-million dollars; a mill rate increase not to exceed 11 total mills; and additional cuts to operations.
Crane says the committee specifically took personnel cuts off the table.
“We have hard working trained staff. These people are our neighbors. They shop in your shops. They contribute to the community,” says Crane. “So, we’re trying to do as much as we can without making a bigger impact than we have to.”
City Manager Rod Swope says he was blunt with assembly members in an executive session about specific positions he’d look to cut if they wanted to go down that road.
“Potential loss of additional police officers, some major rescheduling of shifts for the fire department,” says Swope. “In every department, I think we were looking at a situation where it would have been very noticeable to the public in terms of services.”
Swope says he’s happy with the tools the Assembly gave him. To balance the city’s biennial budget, he needs about $2.3-million dollars for fiscal year 2013 – beginning in July – and $2.1-million for the following year.
The options for one-time funds include asking the Juneau Airport to repay $1-million dollars the Assembly loaned to the terminal renovation project three years ago. There’s also more than $4-million dollars in the city’s sewer and water expansion fund, part of which could be transferred into the general fund.
“That money is sitting there, and currently we don’t have any immediate projects for the next couple years identified,” says Swope.
The sales tax reserve fund contains nearly $9-million dollars, but Swope says he’d only touch it as a last resort.
“The assembly didn’t want us touching that, understandably. They just had a report from a task force, recommending that that money only be used for emergency one-time situations and not be used really to balance the budget,” Swope says.
Juneau’s property tax mill rate is currently 10.55 mills. An increase to 11 mills would bring in an estimated $1.8-million dollars in additional revenue per year. Swope says he and Deputy Manager Kim Kiefer will be looking at additional operating cuts before deciding how much to raise the rate.
“We may be able to squeeze a little bit more blood out of the turnip, but we’re not going to get a lot. We really aren’t,” Swope says. “I think Kim and I both feel pretty confident, we’ve spent a lot of time on this and have gone into great detail. There’s not a whole lot left.”
Randy Wanamaker was the only assembly member to oppose the Finance Committee’s direction to the manager. He disagrees with raising property taxes.
Juneau’s overall mill rate has remained under 11 mills since 2001. Even at 11 mills, the rate would still be lower than other Alaska communities, like Anchorage and the Fairbanks North Star Borough. But Wanamaker says Juneau residents are already paying more property tax than ever before.
“As home values increase, assessments go up. So, if we hold the mill rate at the same level as last year, people are still paying more,” Wanamaker says. “And it’s very difficult. I think that’s not a good step to go to, an automatic property tax increase.”
Wanamaker also says other assembly members are too quick to dismiss the notion of cuts to programs and staff. He points to a recent McDowell Group survey of 400 Juneau residents that found 40 percent preferred cuts to services over raising taxes. Wanamaker says he wants to look at cuts that make sense.
“For instance, if we have a janitor and a police officer. I know that our police force is stretched thin now. You have to choose between the quality of the position, in terms of which position best serves the interests of the community,” says Wanamaker.
Finance Committee Chairwoman Crane argues the Assembly is choosing what’s best for the community. And right now, she says that’s a balanced approach.
“The Assembly is never anxious to raise the mill rate,” Crane says. “But there have been many budget discussions over the last year about how to fill this, we just have some more to go. We’re also doing a two year budget. It’s really hard to predict exactly what your resources are going to be. I hope that we’re in better shape next year than we are this year. But you have to plan for the facts that you have and that’s what we’re trying to do.”
Juneau’s current year budget is about $87.2-million dollars. With increases just for inflation, spending for the next two fiscal years is estimated to be about $88- and $89-million dollars respectively.
Swope retires at the end of this month. Manager-to-be Kiefer will work with the Finance Committee as it continues to refine the plan in April.