Assembly begins budget review process at April 6 Finance Committee meeting

The Juneau Assembly will begin its multi-week process to review the City and Borough of Juneau’s budget for fiscal year (FY) 2023 at the Assembly Finance Committee meeting on Wednesday, April 6 at 5:30 p.m. 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 introduced the proposed budget during the Regular Assembly meeting on April 4. The manager’s proposed citywide budget, including the school district, hospital, and all city enterprises, totals $408 million, which is down $26.9 million from the FY22 Amended Budget. The budget proposes a property tax increase of 0.1 mills, resulting in a total mill levy rate of 10.66 mills. Prior to the 10.56 mill rate established in 2021 for the FY22 budget, CBJ’s property tax rate was 10.66, or higher, for 8 years straight.

The budget reflects increased projections of sales tax revenues and cruise ship passenger fees in anticipation of cruise tourism returning to near pre-pandemic levels this summer. The budget also includes higher property tax revenues as a result of a 6.2% increase to total borough-wide property valuation. This is primarily reflective of the robust residential home sales market during the pandemic in response to high demand and low supply of homes. These revenue increases are offset by inflationary cost growth in both the operating and capital budgets, as well as shifting costs for education funding from the State to the City as a result of property valuation increases. These factors contribute to a general fund deficit of $3.4 million in the FY23 proposed budget.

The budget includes the following major components:

• $86.7 million for the Juneau School District, a decrease of $5.7 million (6.2 percent) over the FY22 Amended Budget. This decrease primarily reflects one-time expenditures in FY22 associated with the Elementary and Secondary School Emergency Relief Fund grant to address the impacts of the COVID-19 pandemic on students, as well as a reduction to the Public Employees’ and Teacher retirement systems on-behalf contributions.
• $179.4 million for Enterprise Funds (hospital, airport, water utilities, docks, and harbors), an increase of $18.5 million (11.5 percent). This change is primarily due to higher anticipated patient volume at the hospital as a result of increased capacity.
• $87.3 million for general government, an increase of $705,600 (0.8 percent) from the FY22 Amended Budget. While total budget change is relatively small, the budget reflects a big shift from federal pandemic relief revenues back to local taxes and other revenues.
• $36.5 million for capital improvement projects, a decrease of $32.3 million (47 percent) from the FY22 Amended Budget. This decrease is a result of significant supplemental appropriations made in FY22 to the capital budget, as well as the Hospital issuing $20 million in revenue bonds for which the proceeds were fully appropriated to capital projects.
• $10.9 million for the debt service budget, a decrease of $4.2 million (27.7 percent) over the FY22 Amended Budget. This reflects a reduction in outstanding school construction debt, as multiple bonds were fully paid off during FY22. However, unreimbursed school bond debt from FY22 will be paid off with property taxes collected in FY23, which keeps the debt service portion of the mill rate flat.

Read CBJ’s proposed Biennial Budget for fiscal years 2023 and 2024. The City Manager’s Budget Message is on pages 19-22.

For more information, contact Finance Director Jeff Rogers at 907-723-6907 or [email protected].