Assembly considering bonds for utilities and school projects, plus renewal of 3% sales tax, for fall ballot

City leaders undecided on proposals after tax cuts passed by voters last year is prompting talk of significant budget cuts, concern about what residents are willing to support this year

The Mendenhall Wastewater Facility is among the many locations in Juneau that local leaders say are in need of overdue major maintenance and upgrades. (City and Borough of Juneau photo)

By Mark Sabbatini

Juneau Independent

Renewing a temporary 3% sales tax is likely to be on this fall’s municipal election ballot, so Juneau Assembly members are unsure if they want to ask voters to also approve an $8 million bond for water/wastewater utility improvements and a $10.7 million bond for school infrastructure projects.

A wide range of opinions was offered by members at an Assembly Finance Committee meeting Wednesday night, which also saw them asking questions such as how recipients of city grants would deal with a 30% cut in funding. Such financial dilemmas are expected to be part of this year’s budget processing after voters approved measures cutting sales and property taxes in last year’s election.

The strongest support for putting both bond measures on the ballot as well as the sales tax was voiced by Christine Woll, who chairs the finance committee.

"I think at the end of the day why we put things on ballots are to give voters the choice," she said. "If they don't want to fund these things then they won't. We don't lose anything because of that."

Juneau currently has a 5% sales tax that includes a 1% permanent tax, 1% temporary tax and a 3% temporary tax. The 3% tax currently includes 1% each for "operations," "projects, grants and other services," and "infrastructure projects (roads, sidewalks and related)," according to a memo presented to the Assembly by Angie Flick, finance director for the City and Borough of Juneau.

Voters have renewed the temporary taxes every five years for decades. Wednesday’s discussion focused primarily on whether the specifics of how the 3% tax is allocated should be redefined, but Assembly members unanimously approved having staff draft a renewal of the tax in its current form for further consideration at future meetings.

The Assembly will need to introduce ordinances putting the tax renewal — and the bonds, if desired — by June 8, and the last day for public hearing and action is July 27 if the items are going to appear on the Oct. 6 municipal ballot, Flick said.

The temporary 1% sales tax is expected to be put before voters during the 2027 municipal election.

The utilities and school bonds were considered by the Assembly last year, but members opted not to put them on the ballot due in part to three tax-related propositions voters were already being asked to consider that had major implications for the city’s finances. Those included a lower property tax cap, and exempting food and utilities from sales taxes, both of which were approved by voters. An Assembly-sponsored seasonal sales tax intended to offset the loss of revenue from the first two propositions was rejected by voters.

Assembly members also decided to postpone the bond measures due to increases in property and utility taxes that had recently taken effect.

The bond for the Juneau School District included projects such as reroofing and boiler room renovation and upgrades at several schools, as well as districtwide security and safety upgrades. The utilities bond was intended to address what local officials have said are long-overdue upgrades and maintenance to the city’s water and sewer systems.

Discussion at Wednesday night’s meeting about reintroducing the bonds included Woll asking each Assembly member to offer their opinions. None of the other members offered definitive yea or nay stances, noting there are numerous factors still needing consideration.

"I know for certain I don't want to look at anything other than the two bond packages we looked at last year," Assembly Member Ella Adkison said. "I think those were well thought out and I would lean more towards the utilities, though I also think maybe there's some looking at the rates we could do in light of everything that's happened."

Assembly Member Paul Kelly, on the other hand, said he would lean first toward putting the school projects bond on the ballot. Mayor Beth Weldon said she is concerned about putting the bonds on the ballot along with the sales tax renewal, but a similar situation could exist next year if the Assembly yet again opts against. Deputy Mayor Greg Smith noted the city has a limit on the amount of bonds it can issue and there may be large future needs such as matching federal funds for glacial flood protection projects that need to be evaluated.

Nano Brooks, elected to the Assembly last fall, said he is "supportive of the spirit" of the bonds, but not putting them on the ballot as currently drafted.

"I think they're both extremely important, but we know that the wastewater utilities, even with the rate increase, is going to need a substantial amount of more funding to really address core issues," he said, "And in a similar vein with the school districts there's still a lot of unknowns with their budget and structuring."

Wednesday’s meeting also featured a continuation of a weeks-long review of various portions of the city’s budget, with recipients of some major city grants appearing before the Assembly to present how their funding is being used. Assembly members said they are facing some difficult decisions in drafting a budget for the fiscal year that starts July 1, due to the tax cuts passed by voters and an indicator of that was seen when Weldon said she would be asking grantees how they would be affected by a 30% cut in funding.

"We're going to be asking hard questions of everybody," she said.

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.