Juneau Assembly considers raising property taxes

A group walks in front of Juneau City Hall on Tuesday, May 10, 2016, in Juneau, Alaska. (Photo by Rashah McChesney/KTOO)

The Juneau Assembly will consider raising local property taxes in the coming fiscal year to help cover school bond debt reimbursement it was expecting from the state.

The Assembly Finance Committee voted 6-3 last week in favor of a proposal that would raise property tax rates by about 1%.

Mayor Beth Weldon proposed the increase and suggested that the added revenue go toward school bond debt reimbursement or other school facility projects.

Juneau will owe an additional $7.1 million next fiscal year if the state decides not to reimburse school bond debt.

The finance committee considered other proposals that would have meant lower property taxes, but Weldon said the city needs to prepare for a worst-case scenario.

“Because of the state budget uncertainty, we didn’t do it that way … to give us a little bit of advantage if we end up with more school bond debt reimbursement than we expected, or more school facility maintenance than we expected,” Weldon said after the meeting.

Officials estimate the city would collect about $480,000 in property tax revenue under the proposal.

The state has traditionally funded between 60% and 70% of municipal debt on school construction projects, but Gov. Mike Dunleavy proposed eliminating that program.

The Legislature’s conference committee voted to fully fund school bond debt reimbursement in the state budget. Both the House and Senate will need to agree on a final version before it goes to the governor for a signature.

That may not happen before the Assembly’s June 3 meeting, when it expects to take up property taxes again.

The Assembly must adopt a budget by June 15.

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