Remarkable things happened Wednesday night at the Juneau Assembly's Finance Committee meeting. In addition to balancing the proposed budget and socking some money away for the Rainy Day Fund, the committee voted to give a 1/2-mill tax benefit to the property owners of Juneau. At a time when Juneau's per-capita income is in decline while property values increase, this is welcome news.
The 1/2 mill rollback will save taxpayers about $1.25 million or 4.3 percent out of the $29 million total. It has been a very long time since the city has reduced property taxes and rarely, if ever, by such a significant amount.
In fact, during the economic downturn in Alaska in the late '80s and early '90s, annual increases in the mill levy were necessary to support the city's operational needs while property values were in decline.
During these hard economic times, there was a fear that the city might be faced with a long-term erosion of revenues from the state and federal government that could put the city's operations in jeopardy. As an insurance policy, the Assembly created the Rainy Day Fund to cover unexpected revenue shortfalls or demands. The fund was used very effectively to combat the 1994 capital move initiative.
Had the capital been moved, property values would have taken a nose dive, and those who remained in Juneau would have seen their property tax rates skyrocket. The city, therefore, prudently made a choice to protect Juneau's future to the benefit of all taxpayers.
It is important to note that placing too much money in the Rainy Day Fund would be a disservice to taxpayers. It would have been all too easy for our Assembly members to find other ways to spend the money they have chosen to forego. Instead, they took the high road.
Wednesday night's measure to roll back the tax rate was widely supported by the Assembly members, although there was a debate as to how much money to place in the Rainy Day Fund and how much to devote to the tax cut. Thanks to the leadership of John MacKinnon, Dale Anderson, Don Etheridge, Ken Koelsch and Finance Committee Chairwoman Cathy Munoz, the 1/2 mill rollback stuck and will pass to the full Assembly for final approval.
Balancing the city's budget is difficult work. The committee and staff worked hard on the research, and carefully weighed the merits of each budget request. Hard choices and compromises were made along the way, but ultimately the Assembly and staff did the people's work in a responsible and effective fashion.
Be sure to add Dale, John, Don, Ken and Cathy to your Christmas card list.