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Bond issue could give Assembly $15 million leeway

Posted: July 1, 2012 - 12:10am

Mayor Bruce Botelho provided the unfolding drama over how to allocate proceedings from a five-year extension of the 1 percent special sales tax with perhaps its biggest twist last week when he recommended a $25 million bond issue to partially cover requests for project funding.

Under Botelho’s proposal, $10 million would be taken from the sales tax revenue over the first five years to help retire bond debt, while the remainder of the $25 million bond would be retired through property tax revenue.

“The concept that I had in mind was to use those … sales tax dollars in the first five years in lieu of using property tax to pay down the debt,” Botelho said. “By using the $10 million in the first five years and then using property tax to retire the remaining debt, taxpayers would not see an increase in their taxes at all, provided that the one constant, or the one other element to property tax … roughly stays the same.”

In essence, the City and Borough of Juneau Assembly would be able to pay for $25 million’s worth of projects that have requested funding from the 1 percent sales tax with only $10 million paid out of that source.

With the Assembly Finance Committee struggling, as evidenced by a three-hour meeting Thursday evening that ended with the fate of many projects still uncertain, to narrow down the amount in requests under consideration to fit within the $44.8 million the sales tax extension would provide, $15 million more with which to work could come in handy.

Botelho said Friday that a bond issue would allow the city to fund important projects that could otherwise not make the cut as Assembly members attempt to determine how to allocate sales tax revenues.

“I think (Assembly Member) Johan (Dybdahl) made the point last night that all the projects have merit,” Botelho said. “It is really trying to figure out how we can stretch resources in a way that will allow us to meet as much of the legitimate demand, and competing demand, for resources as we can get.”

The Finance Committee ended its meeting Thursday having tentatively cut the amount in requests under consideration down to slightly more than $63.1 million. If Assembly members can agree on the bond issue as Botelho proposed it, they would be left with just over $3 million in requests to cut down.

“I do like the idea of the bond, because I think the mayor said correctly, you know, it would enable projects to start right away,” Dybdahl said Friday.

Botelho said he favors forwarding to the voters a transportation bond that would cover funding requests from Juneau International Airport, Docks and Harbors, and the Public Works Department, including Capital Transit maintenance shop renovations.

“I think it is easier, in terms of likely passage, to have a thematic bond, as opposed to a catch-all bond,” said Botelho. “I have a confidence that a bond issue on transportation would pass.”

Some other members of the Assembly think differently.

Assembly Member Mary Becker said she sees the issue in narrowing down allocations as “the necessities versus what I would call the quality-of-life type things, the things you would like to have but aren’t necessities.” During Thursday’s meeting, she used the term “goodies.”

“It’s not that I don’t want, someday, some of these things. But I think the people need to decide if they want to have them,” Becker explained Friday. “If we’re going to do a bond, that’s where those things need to be, unless we’re going to choose not to do our deferred maintenance and things we need to do.”

Becker’s own list of allocations she wants to consider is down to $51.1 million, including funding for Sealaska Heritage Institute’s proposed Walter Soboleff Center, Parks and Recreation facility upgrades, and the airport’s North Terminal renovations.

Becker said if the Assembly authorizes a bond issue — something she said she remains unsure about — she thinks some proposed projects, like the Juneau Arts and Culture Center’s Performing Arts and Culture Center, the Eaglecrest Ski Area Learning Center, and the Dimond Park Library, should be funded through that.

“I don’t think they’re necessarily non-essential for quality of life, but they’re not as essential, in my mind, as deferred maintenance or project infrastructure,” Becker said.

Assembly Member Ruth Danner said she has a similar position on the bond issue.

“I’m a little bit more with Ms. Becker than I am with Mayor Botelho on it,” said Danner. “If we only have … $44.8 million available to us from sales tax … and we want to buy more than we can afford, it seems like the thing we should cover first are the things that we absolutely need.”

Danner said she thinks a bond issue that is strictly for transportation is less likely to succeed at the polls.

“Nobody wants to put their stuff out in the bond, because Juneau voters are really good at accepting the 1 percent sales tax … but bond issues can fail,” Danner said. “I would love to see some of these other projects happen — the new library, the Juneau Arts and Culture Center expanded, the new performing arts center, and frankly, the new airport extension. But I think they have constituents. I think they have supporters that will get out there and campaign for it.”

Danner added, “Nobody’s really going to campaign for (transportation). And it’s only the poor, or the especially environmentally sensitive — the ones who ride the buses — who will suffer.”

• Contact reporter Mark D. Miller at 523-2279 or at mark.d.miller@juneauempire.com.

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