Juneau budget woes worse than originally expected

Juneau City Hall sunny winter day

Juneau City Hall. (Photo by Casey Kelly/KTOO)

After hearing more bad news about the budget, the Juneau Assembly says all options are on the table for reducing spending and increasing revenue.

Finance Director Bob Bartholomew and City Manager Kim Kiefer on Wednesday said the expected shortfall for the next two years will be about $12 million. That’s $7 million more than the administration reported last week.

Bartholomew said two things are driving the shortfall. First, he’s expecting the city to have less money left over each year to be spent in future years – a term called fund balance. Second, the city’s major revenue sources are either going down or staying flat.

“When you have your major programs going from a growth curve to flat, it’s basically helped lead to where we need to find other options for balancing the budget,” Bartholomew told the Assembly Finance Committee.

Bartholomew and Kiefer presented four preliminary proposals for balancing the budget. Right now the city has about $8 million in fund balance and another $11.2 million in savings, both of which could be partially tapped to cover the deficit. Other options include increasing property taxes and reducing programs and services by millions of dollars over the next two years.

Kiefer said she has not decided which programs and services to cut, but said they would touch every department.

“We can’t take little pieces. We’ve been little piecing since 2009, and we don’t have any little pieces left,” Kiefer said.

Assemblywoman Karen Crane, who chairs the finance committee, said the administration should consider all options, including cuts to the Juneau School District and mostly autonomous city enterprise activities like Eaglecrest Ski Area, docks and harbors and Bartlett Regional Hospital.

“I don’t know what we’ll do with that, but we have to factor that information into everything else that we’re receiving,” Crane said. “So as far as I’m concerned everything is on the table at this point.”

Other members discussed options for increasing revenue, including a seasonal sales tax and elimination of certain local tax credits.

The city manager will present her proposed budget to the assembly on April 2. The final budget must be adopted by June 15.