The Juneau Assembly passed a new budget earlier this week, which will take effect in July. The plan includes money to expand child care services and funds the Capital Improvement Plan, among other things.
In addition, Juneau homeowners will pay the lowest property taxes since 2013.
The city uses two primary unrestricted funding sources to pay for its services: sales tax and property tax. In Alaska, property tax rates are recalculated each year after all property values have been assessed. The rate is calculated in “mills.”
The mill rate for the next budget year has been lowered from 10.66 mills to 10.56. If you move the decimal point one to the left you get a percentage of property values.
“So 10.56 mills is 1.056% of property value,” said city finance director Jeff Rogers. “So if you own a $100,000 house you would pay $1,056 a year in property tax.”
Juneau’s rate remained the same at 10.66 for the last six years, but at the end of last year’s budget cycle, some members said the rate would have to increase soon to pay for child care.
“[The assembly] wanted to establish a durable funding source for child care,” Rogers said. “So as the manager started to prepare the budget for next year, he incorporated that and proposed to increase the mill rate from 10.66 to 10.86.”
But Juneau’s property values went up more than expected this year.
“So increased property values means that you could potentially have a lower mill rate and still receive more in property tax,” Rogers said.
If the rate had stayed the same, instead of decreasing, that would’ve meant $540,000 more for the city. On a smaller scale, if you own a $500,000 home, you save $50 for the year.
The assembly’s initial budget assumed Juneau would continue to lose money without sales tax from tourism, but now late summer cruises are on the horizon. Assembly member Michelle Bonnet Hale said online sales tax is another thing to consider.
“Every quarter we bring in more vendors to pay online sales tax,” she said. “If people in Juneau, who are shopping online, are paying that sales tax, then in my mind, people in Juneau should have some drop in their property taxes.”
Hale started pushing for a lower rate last year because she didn’t want the city to raise more money than necessary.
“We’re not in the business of making money,” she said. “What we’re in the business of is making enough revenue to support the government services that we decide we need and at a certain point, it’s not our job to keep sort of buffering the savings account.”
Hale was outnumbered as recently as last month, but Juneau Mayor Beth Weldon and assembly member Maria Gladziszewski changed their votes on Monday.
“I’m just very pleased that we did this,” Hale said. “I think it really sends a strong message to the community and a strong message to the taxpayers in Juneau that we listen to them and we really work hard at balancing the budget correctly.”