A one-time windfall of money from the state allowed the Juneau Assembly to pass a city operational budget that did not require cutting city services or a noticeable raise in property taxes, officials said.
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The Assembly approved a $262.99 million operational budget at its regular meeting Monday night
"We were lucky. The state really helped us out," Assembly member and Finance Committee Chairman David Stone said. "Whether we get it next year, we're not going to count on it."
The city lucked out because the state restructured the public employee retirement contributions this year, saving the city nearly $3.5 million, Budget Analyst Bonnie Chaney said.
"This could have been a really bad year if the state hadn't come through," she said. "It would have been painful. I don't know how we could have balanced the budget without laying people off. It would have been that dramatic."
Property taxes would have likely increased if the relief had not come from the state, Chaney said.
"It would have probably been a combination of the mill rate going up and a decrease in services to the public," she said.
Instead, the Assembly voted Monday to keep the operational mill levy the same for fiscal year 2008 as for the current year, at 9.26. The debt mill levy was increased from .91 to 1.11, raising the total mill levy for fiscal year 2008 to 10.37, up from 10.17.
"We held the line on the property taxes," Stone said.
Finance Director Craig Duncan said that 10 mills is equal to a 1 percent tax of property value, making property owners responsible for paying $1,000 for every $100,000 of assessed property value. A 10.37 mill rate will cost property owners $1,037 for every $100,000 of assessed value.
The debt mill levy is calculated by recent debt approved by the voters, Duncan said. The increase in this year's debt mill levy is largely due to the bonds approved by voters for the construction of Thunder Mountain High School.
Without the one-time windfall from the state, it would have been difficult to not increase the operational mill levy, Chaney said.
"The Assembly is always interested in not increasing the mill levy, so there is that balancing act of trying to provide the same services as we have done in the past without charging people too much money," she said.
The money provided by the state also allowed the city to store some of its savings in a "rainy day fund," Stone said.
Although the approved fiscal year 2008 budget will take effect on July 1, the budget can be amended over the course of the year, Chaney said. For example, at Monday's meeting the Assembly approved appropriating $800,000 for the fiscal year 2007 budget to cover a shortfall to Public Works caused from snow removal during the record-breaking winter.
The city's charter requires a budget be passed by June 15.
Juneau operates on a two-year budget cycle, which is somewhat unique in the state, Duncan said.
"The two-year cycle allows us to look forward into the future," he said. "It forces us to stay a little more rigid in long-term planning by presenting two years at a time."
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