The Juneau Assembly will begin its multi-week process to review the City and Borough of Juneau’s budget for fiscal year (FY) 2025 at the Assembly Finance Committee meeting on Saturday, April 6 at 8:30 am. Join the committee meeting in person at City Hall, online at https://juneau.zoom.us/j/93917915176, or call 1-253-215-8782 with webinar ID: 939 1791 5176.

The City Manager will introduce the proposed budget during the Regular Assembly meeting on April 1. The manager’s proposed citywide budget, including the school district, hospital, and all city enterprises, totals $459 million, which is down $20.5 million from the FY24 Amended Budget. The Manager worked diligently to keep the operating budget flat while addressing both program needs and inflationary pressures. The budget proposes a property tax increase of 0.16 mills, resulting in a total mill levy rate of 10.32 mills. The mill rate increase funds facilities maintenance costs for three buildings the school district will relinquish back to CBJ on July 1 due to school consolidation and closures. Prior to FY24, CBJ’s property tax rate was 10.5, or higher, for fourteen years straight.

The budget reflects increased projections of sales tax revenues to account for higher remote sales tax and the continued impact of inflation on tax revenues. The budget also includes higher property tax revenues as a result of the proposed 0.16 mill rate increase. Borough-wide property valuations remained relatively flat with a 0.6% increase in FY25 over FY24. This rate of increase indicates that the exceptionally hot residential home sale market in recent years is cooling. These revenue increases are offset by inflationary cost growth in both the operating and capital budgets, as well as $3.7 million of shifting costs for education funding from the State to the City. These cost shifts do not result in increased funding to the School District.

As proposed, the recurring FY25 budget is balanced after consideration of a $1 million lapse, and is forecast to have no impact on general fund balance. However, the proposed budget also includes $11.5 million of proposed one-time spending, including $6 million for public safety communication infrastructure, $3 million for a rewrite of CBJ’s Title 49 Land Use Code, and $1.65 million for school district facilities maintenance of buildings currently in use for educational purposes. (The $1.65 million for the school district was already approved via ordinance.) These one-time costs are partially offset by $2.6 million of expected one-time revenue. These general fund one-time expenditures and revenue net to  $8.9 million in expenditures in the FY25 proposed budget, which will be funded by CBJ’s unrestricted general fund balance.

The budget includes the following major components:

• $85.4 million for the Juneau School District, a decrease of $10.9 million (11.3 percent) over the FY24 Amended Budget. This decrease reflects action taken by the Board of Education to make cuts in order to balance the FY25 budget after discovering a structural deficit of $9.5 million in FY24. Cost reductions include facility closures and school consolidation, as well as cuts to personnel and commodities and services.
• $195.8 million for Enterprise Funds (hospital, airport, water utilities, docks, and harbors), an increase of $4.8 million (2.5 percent). This change is primarily due to higher costs at the hospital for insurances and materials and commodities.
• $106.2 million for general government, a decrease of $1.2 million (1.1 percent) from the FY24 Amended Budget. This decrease primarily reflects large competitive affordable housing grants and loans issued in FY24, offset by operational cost growth for negotiated wage increases and inflationary impacts on commodities and services.
• $51.0 million for capital improvement projects, a decrease of $7.6 million (13.0 percent) from the FY24 Amended Budget. This decrease is due to a large one-time appropriation in the FY24 budget for city hall.
• $10.4 million for the debt service budget, a decrease of $1.1 million (9.6 percent) over the FY24 Amended Budget. This reflects a reduction in outstanding school construction debt, as multiple bonds were fully paid off during FY24.

Read CBJ’s proposed Biennial Budget for fiscal year 2025. The City Manager’s Budget Message is on pages 19-22.

For more information, contact Finance Director Angie Flick at (907) 586-5215 or [email protected].

The City Manager’s FY2024 Budget proposes to reduce the operating mill levy to 9.08, which is the lowest since at least 1992. The total mill levy, including voter-approved debt, will be 10.28 mills, a decrease of 0.28 mills from last year. Since 1992, the total mill rate was lower only in 2007 (10.17 mills).

The proposed mill levy for this year still yields increased property tax revenue resulting from a 13% increase to total borough-wide property valuation, which reflects Juneau’s exceptionally hot residential home sale market in recent years. High rates of inflation are driving up both the cost of municipal services and the revenues that fund those services. The Manager’s budget reflects this reality as it proposes to fund an inflationary driven budget, receive more in property taxes and reduce the rate of taxation.

The budget reflects increased sales tax revenues and cruise ship passenger fees in anticipation of cruise tourism returning to record levels in the summer of 2023, with passenger counts estimated to surpass 1.6 million. These new revenues are necessary fund inflationary cost growth in both the operating and capital budgets, as well as $2.3 million of additional CBJ funding for the Juneau School District. As proposed, the recurring FY24 budget is balanced after consideration of a $1 million lapse, and is forecast to have no impact on general fund balance. However, the proposed budget also includes $12 million of proposed one-time spending including $10 million for New City Hall and $2 million for police radio system replacements. The manager has also proposed to deposit $4 million to the Restricted Budget Reserve. These one-time investments yield a general fund deficit of $15.3 million in the FY24 proposed budget, which will be funded by CBJ’s significant unrestricted general fund balance.

The budget includes the following major components:

• $96.3 million for the Juneau School District, an increase of $9.7 million (11.1 percent) over the FY23 Amended Budget. This increase primarily reflects an increase to the Public Employees’ and Teacher retirement systems on-behalf contributions.
• $177.2 million for Enterprise Funds (hospital, airport, water utilities, docks, and harbors), a decrease of $6.1 million (3.4 percent). This change is primarily due to cost reductions at the hospital in light of lower than anticipated revenue projections.
• $101.6 million for general government, an increase of $6 million (6.2 percent) from the FY23 Amended Budget. This increase primarily reflects negotiated wage increases, inflationary impacts on commodities and services, and an increased amount of sales tax spent on CIPs in light of higher tax revenues to aid against the rising cost of construction.
• $57.9 million for capital improvement projects, an increase of $7.7 million (15.3 percent) from the FY23 Amended Budget. This increase reflects the proposed $10 million appropriation for New City Hall and $2 million investment in police radio upgrades.
• $11.5 million for the debt service budget, an increase of $652,200 (6 percent) over the FY23 Amended Budget. This reflects a reduction in outstanding school construction debt, as multiple bonds were fully paid off during FY23, offset by new debt service for the $6.6 million general obligation bond approved by voters on the October 2022 ballot. This new debt obligation in FY24 keeps the debt service portion of the mill rate flat.

Take a tour of the proposed CBJ budget and try your hand at balancing the budget in a way that funds your priorities!

For a complete summary of the general fund budget, check out the City Manager’s Budget Message on pages 19-22 of the FY24 Budget Book. The City Manager will introduce the proposed budget during the Special Assembly meeting immediately before the Assembly Finance Committee meeting on April 5. Join the committee meeting on Wednesday, April 5 at 5:30 p.m. in person at City Hall, online at https://juneau.zoom.us/j/93917915176 or call 1-253-215-8782 with webinar ID: 939 1791 5176.