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City Manager’s Budget Proposes Reduced Property Tax Mill Rate

April 4, 2023 – News

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.