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Expecting a $6.3 million surplus from sales and property taxes, the city of Juneau is likely to reinstate morning half-hour bus service and other programs that were cut last year.
To balance the budget last year, City Manager Rod Swope had to cut nearly $1 million. He eliminated the city's half-hour bus service from 8 a.m. to 11 a.m., Monday through Friday. He removed funding for planner and building inspector training. Each department was asked to come up with up to a 5 percent reduction in its budget.
But this year, the city could restore the bus service and training because of unexpected revenue increases. The Assembly is also considering lowering the mill levy to alleviate the taxpayers' burden.
"We have received a lot of complaints after we took away the half-hour bus service in the morning," Swope said. "I feel this is something we need to put back once we have the money."
Bus passengers welcomed the idea Thursday. Alex McDonald Kyle, a former bus driver from Vancouver, British Columbia, said the city needs to provide bus service during rush hours. Resident Ronald Peterson, 65, said people need the morning bus service to go to work.
Swope also proposes allocating $30,000 to Capital Transit to buy uniforms for bus drivers. The uniforms would have the drivers' names and a city logo.
"The drivers would look more professional," Swope said. "Passengers can get to know their drivers. If they want to complain, they know the drivers' names."
The Assembly Finance Committee has approved Swope's proposal. The Assembly will make final decisions on the budget by June 15. The new budget becomes effective July 1.
Most of the surplus comes from property taxes. Property assessments rose by 16 percent this year. The city is expecting $34.6 million in property tax, $3.7 million more than projected. Projected sales tax collections are up $2.4 million, to $30.4 million.
Swope said low-interest loans and updating of commercial property values contributed to the property tax increase.
"The low-interest loans increased the demand for housing, which in turn resulted in an increase in home values and the construction of new homes and home improvements," Swope said in the city's proposed budget.
City Assessor Jim Canary said he has brought the city's commercial properties, especially those downtown, closer to their true market values.
"South Franklin sees the biggest impact because it is the most valuable commercial property in town," Canary said. "The average increase is 285 percent."
The boost in sales tax has to do with improvements in the economic climate, a strong summer tourist season and significant increases in the purchase of home improvements and construction materials because of last summer's sunny weather.
With extra money in the coffers, the Assembly Finance Committee is considering restoring some $41,000 to nonprofits that include the Juneau Arts and Humanities Council, the Juneau Economic Development Council and the Douglas Fourth of July Committee.
The Assembly also decided to give property owners a break.
The finance committee will discuss the extent of mill levy reduction at its next meeting May 4. Right now, the mill levy is 12. City Finance Director Craig Duncan suggests lowering the mill levy to 11.3, a 5.8 percent drop. A mill equals $1 of tax for each $1,000 of assessed values.
Assembly member David Stone, chairman of the finance committee, said the Assembly will decrease the mill rate but the decrease might not be as much as people desire.
"We don't need to collect more than we need," Stone said. "But we need to leave money for the additional cost of PERS (Public Employee Retirement System). We don't want to reduce it this year and increase it next year."