Juneau Assembly expected to approve sales tax, bond propositions for municipal election

The Juneau Assembly will take public comment tonight on two large-project funding packages likely to appear on this fall’s municipal election ballot.

It’s the Assembly’s last chance to tweak the measures — a five-year extension of the city’s temporary 1-percent sales tax and a nearly $25 million bond proposition — before sending them to voters.

The ballot propositions would earmark funds for nearly 40 projects — from upgrades to the city-owned airport and harbors to park and trail improvements and borough-wide deferred maintenance.

For nearly three decades, Juneau voters have agreed to a 1-percent project tax as part of the city’s 5-percent overall tax on the sale of goods. They’ve also approved numerous municipal bond measures to pay for various capital projects, including Thunder Mountain High School and the Dimond Park Aquatic Center in recent years.

But by all accounts, combining the two in the same election is a novel approach by the Juneau Assembly. Mayor Bruce Botelho says he proposed it, because the number of worthwhile projects exceeded the amount that could be covered by sales tax alone.

“There were competing important needs in terms of the airport, in terms of docks and harbors, the hospital and so forth, that we could effectively achieve those things which were necessary for the community by this combination of sales tax and bonded indebtedness,” Botelho says.

What makes the proposal unique is that $10 million from the sales tax extension would be set aside to pay down debt on the bonds, thus avoiding the need to raise property taxes. That basically forces voters to consider the measures as one, rather than two separate funding packages.

The sales tax revenue would be used to pay for things like a new snow removal equipment storage building at the airport; an adolescent mental health facility at Bartlett Regional Hospital; and more than a dozen park and trail improvements. About $5 million in sales tax money would go into the city’s rainy day budget reserve. Another $5 million would go toward deferred maintenance at city buildings.

The $25 million bond package would pay for a handful of large projects. That includes renovating the old terminal building at the airport; upgrades to Aurora Harbor; a new Learning Center at Eaglecrest Ski Area; and deferred maintenance at Centennial Hall.

Botelho says the benefit of bonding is that projects can get started right away.

“The situation with sales tax is that, of course, we don’t receive the entire amount of money in the first year,” Botelho says.

Though the Assembly has not yet approved the ballot measures, some voters are already voicing concerns. The Juneau Chamber of Commerce recently surveyed its members, and while only a third responded, more than half of them thought the Assembly should hold off until next year when the sales tax is due to expire. The survey also showed nearly 76 percent disagreed with the use of sales tax and bonds to fund deferred maintenance, even though voters have agreed, every time it’s been included in previous sales tax extensions.

“I think the concern with some of the items that are on the list, is some of the items seem to fit more into the category of things that we should be maintaining every year, rather than waiting to do down the road,” says Max Mertz, a member of the chamber’s government affairs committee.

Mertz is quick to point out that the chamber generally supports capital projects, which provide private sector jobs. In fact, in 2010 the chamber backed a controversial proposal to extend the project tax for 10 years for the sole purpose of building a second crossing to Douglas Island.

Along those lines, the survey also asked members to rank which projects they thought were most important. At the top of the list was funding for a Salmon Creek water filtration system, which is tied to ongoing efforts to reopen the AJ Mine near downtown Juneau. That was followed by airport and harbor improvements, projects Mertz says are designed to build the city’s infrastructure.

“And others that don’t fall into those general categories of infrastructure and helping develop the community along those lines had less support,” Mertz says.

At the bottom of the chamber’s list is funding for the Eaglecrest Learning Center. Ski Area General Manager Matt Lillard says that’s one group’s opinion, and he thinks the project may be misunderstood by some who see it as a “want” and not a “need.”

“From a staffing standpoint, we’ll actually be able to centralize some more of our staff and streamline how we do some processes, which should be able to cut down on those labor costs, which are a huge part of our operations,” Lillard says. “It’ll also allow us to open up some areas in the current base lodge. We can actually convert some of that space into seasonal lockers and other types of things that will garner us some revenue.”

Mertz says the chamber survey was designed to inform the group’s membership and is not an official position on the proposed funding packages. Nor does he expect the chamber to take a position for or against the measures before the municipal election.

Mayor Botelho says the measures could face some changes at tonight’s assembly meeting. But he doesn’t think they’ll be significant.

“The package is the result of testimony that we received. It’s the result of a lot of give and take among nine members to come up with what those nine members believe to be in the best interest of the city. This was our best judgment,” Botelho says.

And come October 2nd, it’s very likely voters will have a chance to cast their judgment on the projects.

To see a list of the projects in both the sales tax and bond propositions, click here [PDF]

Recent headlines