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) 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].