Sales tax for city projects comes up short

Juneau airport, harbors, sewers and public works facilities may be affected

Posted: Tuesday, November 10, 2009

A 1 percent sales tax Juneau voters approved in 2007 is projected to fall $2.9 million short of the $43 million sought for city projects slated for funding in the next few years, leading city officials Monday to begin hypothesizing about what can be cut.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

The tax is in effect until 2014, and is divided into $10 million for the airport terminal renovations, $10 million for a new, consolidated public works shop, $10 million for sewer extension and development, $5 million for improvements at Statter Harbor, $4 million for city building maintenance and $4 million to pay off school debt.

City officials updated the Juneau Assembly's Public Works and Facilities Committee and lobbied for their departments' projects.

"The Juneau International Airport is the first and last thing the traveling public sees - and that includes legislators, lobbyists and guests," Airport Manager Jeannie Johnson said.

She said the airport had already scaled back on necessary repairs to match available funding.

"We have way more needs than we have money," she said. "We are counting on getting $10 million in sales tax from CBJ."

Passenger count is down, meaning the airport has lost funding on the fee it collects for each passenger, she said.

City Docks and Harbors Director John Stone said facilities at Statter Harbor are "pretty much at the end of the useful life."

"They all need some type of repair," he said.

Sales tax money dedicated to Statter Harbor is slated to go to a new recreational boat launch ramp and about 100 trailer parking spaces. The Alaska Department of Fish and Game would provide about $2.5 million in federal grants for the $8 to $9 million project, Stone said, adding that most city money for projects at the harbor is matched by the state.

Stone said Docks and Harbors needs $20 million to rehabilitate facilities in Auke Bay. Counting $2.5 million in sales tax from a 2006 vote and Fish and Game funding, it has about $17.5 million. "Even with grants and full sales tax funding, we will likely be short of our funding needs," he said in a memo to the committee.

Mike Scott, speaking for the Public Works department, presented a different picture of its $10 million allocation for a consolidated facility. The department expects to have $500,000 to $1 million left over, he said.

The $10 million provides money for the highest priority of an estimated $15 million cost for the facility, according to the 2007 tax proposition.

Engineering Director Rorie Watt said sales tax has been an important component in the city's ability to get state grant money for sewer extensions. "With the next $10 million we have to decide where and how far to go and how much grant money to target," he said.

Watt also said there are "dozens" of municipal buildings that need repairs.

Paying off $4 million in school bonds would help reduce property tax, as promised in the 2007 elections, said Watt.

"In the end, it's going to come down to us as the Assembly and be our responsibility to be sure the dollar figures are accurate (and balanced)," Committee Chair and Assembly member Merrill Sanford said. "It's an interesting situation we're in."

This sales tax is one-fifth of the 5 percent total sales tax the city collects. All together, the city was forecast to bring in about $41.4 million in sales tax in the budget year that ended June 30, but was off about $1.5 million, or 3.5 percent, based on figures from city Budget Analyst Bonnie Chaney.She said the city's sales tax office is currently calculating sales tax returns for its third quarter of the year, which ended Oct. 31. The returns are expected next week.

Those first three quarters will be the topic of a finance committee meeting Dec. 2, Assembly member and Finance Committee Chairman David Stone said. All Assembly members sit on the Finance Committee.

"We wanted to hear how the first three quarters went because we know it's going to affect our budget," he said. "It's sort of a reality check so that we know where we're at in terms of revenues. ... We know we're headed for difficult times; we just don't know how difficult."

• Contact reporter Mary Catharine Martin at 523-2276 or

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