As Assembly wrestles with $34.5 million deficit, manager introduces budget tool & recommends delaying pool renovation

The City and Borough of Juneau is looking at a revenue shortfall of $34.5 million over the next 30 months, due to factors related to the COVID-19 pandemic. In light of this projected loss, City Manager Rorie Watt is introducing a budget tool at tonight’s Assembly Finance Committee meeting to help the Assembly balance the budget. The meeting starts at 5 p.m.

“Given our economic situation, we simply cannot continue to provide the same levels of public service at the same levels of taxation. Several somethings have to give and that includes cutting services and employment, raising taxes, spending reserves and/or being fortunate enough to get financial aid from the State as result of the Federal CARES legislation efforts,” Watt said.

The biggest part of the $34.5 million deficit stems from loss of sales tax, as well as less state funding for school bond debt reimbursement. In the proposed budget, which was introduced April 1, the City Manager recommends a property tax increase of 1 mill, for a total mill levy rate of 11.66. This would partially offset the loss from sales tax; 1 mill for one year generates about $5.5 million in revenue. For the typical homeowner, the proposed mill rate increase would result in a $300-$500 increase to annual property tax, and considerably less to an individual living in a condominium or rental apartment.

The interactive, high-level budget balancing tool is an Excel spreadsheet that allows you to “fix” the deficit by looking at changes to revenue and expenditures. Revenue changes include property tax increase, drawing from savings, as well as COVID-19 funding. Expenditure changes include reduction in CBJ operations, reduction in Assembly grants, as well as reduction in capital improvement project funding.

One of the expenditure change options is a reduction of capital improvement project funding to the Augustus Brown Pool in Downtown Juneau. A major renovation at the pool is scheduled to start in July. In a memo to the Finance Committee dated April 14, the city manager is recommending to delay the renovations, maintain the pool in good working order, re-allocate the $3.3 million of capital improvement project funding to the budget problem, and to revisit this situation in about six months.

The Assembly is scheduled to pass a budget and set the property tax mil levy by June 15.

For more information, contact City Manager Rorie Watt at 586-5240 or [email protected].