City of Houston, Alaska ready to turn out the lights

Houston City Hall. (Photo courtesy City of Houston)
Houston City Hall. (Photo courtesy City of Houston)

The City of Houston is facing such severe financial woes that all but three city employees have been furloughed. Houston mayor Virgie Thompson is working without pay, and volunteers are keeping the wheels of city government turning.

Houston, on the Parks Highway in the Susitna Valley, has hit the financial wall. Thompson blames the crisis on unpaid property taxes.

“There’s a little over $35,000 delinquent,” Thompson says. “In other words, they haven’t paid it. So that’s $35, 000 right now that we don’t have that we projected to have.”

The city of about 2,000 residents is just beyond commuting distance to Anchorage. There are few local jobs, and state revenue sharing funds from this fiscal year are running out. Thompson says the city’s greatest source of revenue is property taxes, and that the much ballyhooed Alaska Railroad spur linking Houston and Port Mackenzie is not helping bring in any money.

“Part of that is owned by the borough, and you can’t tax the borough. The other part is owned by the state, and you can’t tax the state. The basic infrastructure is there, but until the private sector comes in and does something with it, it’s not taxable,” Thompson says.

Thompson says she’s putting in the 80 hours a month required by city law, but is not turning in her time card to the finance clerk to keep her $1,500 monthly salary in the coffers.

The finance clerk, along with the city’s fire chief and city clerk, are the only Houston city employees now drawing a paycheck.

The city is not legally allowed to borrow money. City sales taxes bring in some revenue during the tourism season, which has barely started, and next year’s state revenue sharing is still on the horizon. There is some money in the Matanuska-Susitna Borough budget for Houston: $9,500 for the fire department and a $21,000 block grant to be used at the city’s discretion.

The Mat-Su Borough budget for next year has been approved, but is awaiting expected vetoes from Mayor Larry DeVilbiss, which will be announced this week.

Thompson says it’s normally June before money gets tight.  This year she says the financial squeeze started in April.  Thompson says the city will struggle to provide the services that property owners who did pay taxes deserve.

 

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