Juneau’s $15.3 million budget shortfall is “really pretty scary” for Linda Thomas, a member of the Juneau Chamber of Commerce’s Government Affairs Committee.
Members of the committee spoke at the weekly chamber luncheon Thursday at the Hangar on the Wharf, addressing the shortfall and what the chamber thinks the City and Borough of Juneau Assembly should do to fix it.
Thomas said that although the shortfall is something that’s trying to be fixed quickly, it raises questions about Juneau’s economic future. A quick fix won’t do anything to prevent a major budget crunch from happening again the next time around, she said.
“We have a short-term issue right now but there are a lot of red flags for our community,” Thomas said.
She referenced the Juneau Economic Plan, a 10-year economic road map being prepared by McDowell Group and Sheinberg Associates and commissioned by the city. Thomas said Juneau’s flat growth and aging population — as reported by McDowell Group — should be a sign to the Assembly and staff that more long-term budget projections need to be made.
“We’re very lucky at this point that we have a little time to react,” Thomas said of the city budgeting process. The FY 2015 budget must be adopted by July 15, according to city charter.
The Assembly has been meeting as the Assembly Finance Committee each week to discuss what will and won’t be cut to eliminate the shortfall. In addition to $3.6 million in service and job cuts proposed by city manager Kim Kiefer at the beginning of April, she proposed an additional $1.6 million in service and job cuts at Wednesday’s finance committee meeting. Committee chairwoman Karen Crane said at the meeting that her group will have to start making tough decisions in the next two weeks to stay on track to be done by mid-June.
Another proposed component to balancing the city budget is a raise in property tax that would affect every property owner in Juneau. The increase, about 1 percent, would add about $142 in property tax per year on a $300,000 home. Although that sounds like a drop in the bucket, chamber President Elect Lance Stevens said the biggest employers in town would be paying thousands more in taxes. It’s just not good for Juneau businesses, he said, or for attracting more people to town.
A property tax increase would affect everyone from home owners to business owners to renters who will have to absorb their landlords’ extra tax expenses, he said.
“Their costs are going to go up — there’s no way around it,” Stevens said.
Stevens and fellow Government Affairs Committee chairwoman Lorene Palmer spoke at Monday’s Assembly meeting against raising taxes. The Chamber wrote a letter to the Assembly on March 26 with suggestions on balancing the budget. Included in the letter was a recommendation to fix city buildings instead of building new ones. One of those, Palmer said at the chamber lunch, is the new Mendenhall Valley library. The library’s construction bid was awarded to Dawson Construction Inc. for more than $11 million at the Monday Assembly meeting.
“We don’t want new facilities on the roll until we’re taking care of what we have,” Palmer said.
• Contact reporter Katie Moritz at 523-2294 or at firstname.lastname@example.org. Follow her on Twitter @katecmoritz.