The Juneau Assembly approved a city budget on Monday based on the lowest property tax rate in decades.
The mill rate of 10.16 means that for every $1,000 in taxable property value, there would be a tax of $10.16. It’s lower than the 10.28 mill rate city staff proposed at the start of the budget process, which was already lower than last year’s rate.
It’s the lowest mill rate since at least the late 1990s, according to city Finance Director Angie Flick. But because property values have gone up, some residents will still pay more tax than last year.
Auke Bay resident Tom Williams asked the Assembly to consider an even lower mill rate.
“It just doesn’t do well for families that are struggling already with large increases in their cost of living, seniors subject to limited revenue, and it pushes up the price of housing,” he said.
But Assembly members said 10.16 was as low as it could be this year. Originally, it would have left the city with a $1.1 million budget deficit. To make up for that, the Assembly reduced the amount put into savings from $4 million to $3 million.
The budget leaves $9.2 million in the unrestricted general fund and $19.6 million in the restricted budget reserve, according to Flick.
“We do have a good amount in savings because of past assemblies and past city managers and past staff that have saved money,” Deputy Mayor Maria Gladziszewski said on Monday. “We passed a balanced budget, we lowered the mill rate as much as we could to provide the services people ask for.”
The largest portion of general government funds – $33 million – goes to the school district. That’s followed by the police with $21 million, then fire and emergency medical services with $15 million.
The budget draws $2 million from reserves for recurring costs. Assembly member Alicia Hughes-Skandijs expressed some hesitation about that, saying the Assembly should be prepared to pay for what they add to the budget.
“I don’t think you can have both, where we add to our ongoing costs and we also look for the lowest mill rate,” Hughes-Skadijs said. “The math doesn’t add up.”
Member Carole Triem, who chairs the finance committee but was absent from the meeting where the committee set the mill rate, agreed.
“Responsible fiscal policy would say we should not be deficit spending at the moment, and I disagree with the overall combination of choices that we’ve made,” she said. “But I know I’m in the minority.”
Michelle Hale, who proposed the 10.16 mill rate last month, said the Assembly had the money this year to make up for the $1 million deficit. She said the city regularly gets more sales tax than anticipated.
“I think that is also good fiscal stewardship, to not continue to just endlessly tax our people and then have the extra money at the end of the year,” she said.
The budget includes $10 million toward a new city hall. The Assembly is expected to vote on whether to put a $27 million bond proposal on the October ballot next month.
