During the City and Borough of Juneau’s (CBJ) October 7, 2025 Regular Municipal Election, Propositions 1 and 2 (Mill Rate Cap and Sales Tax Exemptions respectively) both passed. While concrete numbers have not yet solidified, these propositions are expected to result in a $10-$12M reduction in CBJ’s general fund revenue. Ahead of these projected revenue reductions, CBJ is planning a purposeful and robust public engagement process to ensure the Assembly is able to appropriately consider public sentiment on how, where, and when reductions should be implemented.

Funds are a financial tool used by governments to track revenue and expenses associated with particular purposes.  A general fund is typically the unrestricted fund used for the day-to-day operations of a government, as opposed to restricted funds used for special purposes. CBJ’s general fund is supported by money the public pays through property taxes, permit fees, and various other fees and fines like facility access fees for pools or the ice rink.

In your personal life, you may have a main checking account that is fed by revenue sources like your paycheck and used for all your day-to-day expenses.  You can think of this as your own personal general fund!  However, you may be saving for a vacation or have a college savings account for your child. You could think of these as restricted funds, or funds that are set aside for a special purpose.

Sales tax revenue collected in the general fund is typically reinvested in the public, in the form of city services. Fire and emergency services, police, parks and recreation facilities and programs, library services, snow removal and street maintenance are common examples general government services. Additional funding for the Juneau School District and a subsidy to Eaglecrest operations are examples of services and programs that utilize the general fund in their annual budgets.  CBJ’s Assembly Grants, which provide funds to a number of local non-profit organizations and community groups focused on providing social services are also general funded.

View amounts that specific CBJ departments and services are funded through the general fund. 

The most common other funds are enterprise, special revenue and internal service funds. These same funds are also used to track different types of expenditures.

Enterprise funds are parts CBJ’s operations which operate like a business. These funds are present in operations like the Juneau International Airport, Bartlett Regional Hospital, as well as Docks and Harbors. These organizations must set rates and fees to cover the cost of doing business and address capital needs.

• Special Revenue Funds are used to track and specifically restrict the use of incoming funds for a specific purpose. The Eaglecrest fund is a good example of a special revenue fund. Revenue from the mountain operations are restricted to be used to fund the needs of Eaglecrest.  There are other special revenue funds like the Marine Passenger Fee Fund, Debt Fund or the Lands Fund.
• Internal Service Funds are utilized to track and pay for goods and services that are purchased by one department or service but utilized by another.  Risk Management is a good example of an internal revenue fund. The various components of CBJ (including JSD and BRH) need to be insured for general liability, property damage and for the health insurance for their employees.  The Risk Management team buys and manages those insurance policies and programs.  The benefited services or departments pay service rates to get coverage from Risk Management.
• Capital Improvement Funds receive monies from various sources such as sales taxes, marine passenger fees, port development fees, or grants. The expenses that are recorded in a capital improvement fund are typically one-time in nature meaning we’re going to do this project and then be done. An example might be a project to put a new roof on a school.  That will be done once for that school and then not done again for decades.

View a breakdown of funds in the overall CBJ budget. 

Grants can be both ongoing in nature (awarded year after year) or one-time in nature. Grants are typically very restrictive and are accompanied by meticulous and comprehensive reporting requirements.

CBJ receives regular grants for emergency operations that are utilized to run an ongoing program with staff. CBJ also receives one-time grants that are often used to buy a piece of equipment or do a study or investigation. For example, CBJ was awarded grant funds to purchase electric buses used by Capital Transit. Once the buses were purchased, the grant funding was over.

Capital projects can also be funded via grants. These are often one-time projects, and funding cannot be reallocated – think “use it or lose it”. Common examples are federally-funded Capital Improvement Projects and projects funded through the Marine Passenger Fees, which are required to meet criteria defined in the settlement with the Cruise Lines international Association.

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Assuming a Juneau population of 31,555 per the most recent census, the full CBJ expense budget for FY25 was $513.6M, or $16,275 per person. Of this, $122M was through the general fund budget, which equates to $3,889 per person.

These expenditures show up in the lives of Juneau’s residents in a number of ways, through several different CBJ departments and services. Some common examples are street maintenance and snow removal, access to Parks & Recreation facilities, and Juneau Public Libraries.

View amounts that specific CBJ departments and services are funded through the general fund.

Various departments are funded in different ways through the general fund, and each department uses the funds a bit differently.

View amounts that specific CBJ departments and services are funded through the general fund.

View a listing of specific services per department, as described during the Assembly Retreat on December 6, 2025.

This  question is extremely difficult to answer with great confidence and precision. Sales tax is not reported by merchants based on who made a purchase. What we can see is that roughly 64% of sales tax revenue is collected in the “summer” quarters (April through September).

Below is the full calendar year of 2024.  If we assume Quarter 1 and Quarter 4 represent resident spending, and if we assume resident spending is consistent all year, we can calculate that residents pay approximately $46.7M of the full $65M in sales tax revenue.  This means that $18.3M is paid for by visitors.

Read the April 16, 2025 Assembly Finance Committee Packet.

The FY26 mill rate (excluding debt service) was 9.16. To meet the new requirement, this will be lowered to 9.0 and is equivalent to approximately $1M of revenue.

The CBJ Sales Tax code provides for a large variety of sales tax exemptions. These exemptions represent lost revenue of $101.8M in calendar year 2024, based on reported sales from merchants.

Proposition 2 exempts all SNAP eligible foods sold in the borough from sales tax, as well as essential utilities of residents for solely non-commercial use. These exemptions are specific, and sales tax reporting has not required this level of data be submitted by merchants to the CBJ.  This means that a clear and clean calculation of the impact is impossible to predict.

CBJ staff looked at available data and has estimated the annual sales tax revenue reduction will be approximately $11M, roughly $6M from food and $5M from utilities.  It will take some time before actual data is collected to assess the accuracy of these estimations.

Reserve funds are known by many names such as Rainy Day Funds, Slush Funds or Restricted Reserves. CBJ calls it the Restricted Budget Reserve (RBR).

The idea behind a reserve is to have enough cash on hand to address an emergency and keep the government running while a plan is implemented to address the situation.  Many governments experienced this exact scenario in 2019 and 2020 as COVID had a large impact on many sectors of the economy. Here in Juneau, we received a large amount of funding from the Federal Government, so we did not have to draw much from CBJ reserves to supplement COVID relief efforts. If CBJ had not received this federal funding, the reserve fund would have been used to continue to do the core functions of the government while appropriate adjustments were made.

According to the leading experts and the best practices of the Government Finance Officers Association (GFOA), governments should have 3 months of operating expenses or revenues plus adjustments for risk of your particular community.  CBJ has adopted a policy of having 3 months of operating revenue in the RBR. For FY26, CBJ’s anticipated operating revenue was $156.7M.  3 months (or 16.7%) is equal to $26.2M. CBJ currently does not have enough in their RBR with an available balance of $16.9M, roughly $9.3M short.

While grants can and do represent funding to specific projects, it is inappropriate and dangerous to treat them as renewable and reliable revenue sources. CBJ grant applications often compete with hundreds of other projects for the same pool of funding, and these awards tend to be highly specified and heavily qualified in terms of approved project costs. Additionally, many grants are structured to be reimbursable – meaning CBJ does not receive a lump sum in advance of a project. Rather, the grant making entity reimburses receipts for approved costs. For these grants, CBJ needs to be equipped to cover immediate expenses to be reimbursed at a later date.

It’s also worth noting that federal grant landscapes can be highly volatile and vary by administration. The values and funding priorities of the current federal administration differ greatly from those prior, and grants received in the past may have been terminated or otherwise discontinued due to these operational differences.

Investment income is an important element of budgeting. It is wildly unpredictable, even with government investment policies being highly conservative. In FY22, CBJ experienced investment losses rather than income.  In FY25, CBJ benefited from a positive market and yielded $11M of investment income above budget.

Similar to most governments, CBJ’s focus is on the safety of the principal funds first.  We don’t want to invest in anything that will make our deposits less than we put in. Next, we must ensure that the funds are available in cash when we need it to pay expenses. Then the last thing to focus on is the investment yield. We want to earn the most possible in investment earning while maintaining our principal balances and having access to cash when it is needed.

There are cases in which interest earnings do pay for operating expenses. The Jensen-Olsen Arboretum had a generous donor who required funds be put away and only allowed the interest earned to be used to support the arboretum.  In these scenarios, the core investment cannot be touched – only the potential annual earnings. The investment strategy for this particular cause is focused on safety and earnings to ensure work can continue at the Arboretum.

CBJ works closely with their investment advisors to predict the market behavior in the upcoming year and conservatively estimate how much revenue will materialize from our investments.

CBJ can absorb expenses periodically through use of fund balance, but this practice is not sustainable.  The ongoing expenses to operate must have regular revenue to support it.

For example, an individual has day-to-day expenses: groceries, rent/mortgage, utilities, fuel and insurance for a vehicle, etc. One’s paycheck should be sufficient to fully fund these day-to-day expenses.  If the paycheck is not enough, we must consider trimming back on costs or increasing our income by picking up another job or finding a higher paying job.  One can pay their bills from their savings account, but only for a limited time.  As an example, it’s common to pay for basic expenses from a savings if you are moving and need to maintain two households during the transition.

CBJ’s ability to potentially absorb revenue shortfalls varies year to year based on a variety of factors. This year, CBJ may be able to absorb revenue shortfall due to unexpected investment earnings, staff vacancies, and other sources of savings. CBJ cannot reliably predict or rely on such factors every year and therefore generally engages in conservative budget planning.

Absorbing the revenue shortfall in FY26, which can only be estimated for a while, is a short-term solution as the Assembly has time to gather real revenue impacts. This absorption cannot be continued as the savings account will eventually run dry.

User fees can be increased to an extent, and it would not be unreasonable to expect them to do so if projected reductions are realized. The gap between the cost of services and what individual members of the public pay is quite large in some circumstances. For example, the Dimond Park Aquatic Center generates $476K in revenue, but it costs nearly $2M to operate. Fees would need to increase 400% to have full cost recovery. Maintaining streets and simple street repairs cost approximately $5.5M a year, and implementing a fee for using roads or sidewalks would be both complicated and expensive for users. In this way, increased fees should not be viewed as a singular way to compensate for potential general fund reductions.

The full fee cost of providing many of CBJ services are substantial and are either nearly impossible to implement as a fee or would result in pricing out large swaths of the community from being able to access the services.

Lapse is used in two ways at CBJ as a way to describe potential savings where the “who” or “where” is not predetermined.

First is the lapse in the context of setting the mill rate (property tax rate). In this instance, CBJ knows the total amount of general fund revenue required to cover the expenses in the upcoming fiscal year.  However, we know that we probably won’t actually end up spending it all although we can’t say at the time of the budget who is going to have savings or which department will experience it. In this case we reduce the amount of property tax needed to cover expenses by a value to under collect the full revenue needed to fully fund the expenses. In FY26, CBJ planned for $1,738,200 in lapse (savings from somewhere) when setting the mill rate.

Second is the historical look at expenses from a prior year and identifying the under spending or savings. Typically, the fiscal year budget in a line (like salaries) is then compared to how much was expended for salaries. If the expense is less than the budget, the difference is called lapse.

Lapse does not reduce the budget. Rather it acknowledges that the budgeted expenses will not all come to fruition.

Maybe for a year or two. Cutting capital projects is essentially the same thing as spending from one’s savings account.  If the recurring revenue is being reduced, the recurring expenses must also be reduced.

Capital projects also tend to be in line with longer-term community goals. For example, in FY26 CBJ’s Community Development Department began the process of creating a new community-informed comprehensive plan. A number of capital projects will likely be realized by the assembly at the end of this process. To identify these projects and then rescind or reallocate the associated funding generally goes against public input CBJ has received to direct these efforts.

At the 2025 Assembly retreat in December, the Assembly gave direction that they wanted to tackle the FY27 budget gap using three tools:

• $3M-$4M in reductions from the Manager with budget assumptions. This means more closely aligning past expenses with next year’s budget and it creates a tangible reduction in budget (as opposed to a lapse).
• $2M-4M in reductions in services made by the Assembly.
• $2M in increase revenue which is the responsibility of both the Manager and the Assembly.

Take the CBJ Community Compass Survey (link), sign up for an in-person workshop (link), or attend one of the Assembly listening sessions (link)! Data from all of these engagement opportunities will be used by the Assembly to better inform their decisions during the budget process this spring. If you’re interested in attending the upcoming Assembly Finance Committee meetings, be sure to pay attention to the Assembly Calendar to know when these meetings take place.