‘Good chance’ voters cut Juneau’s funding via ballot measures; debaters disagree if that’s desirable
- Mark Sabbatini
- Sep 18
- 5 min read
Updated: Sep 19
Supporter of cuts to property and sales tax cuts calls city’s budget lavish; backer of seasonal sales tax to offset food/utilities tax exemption says times are lean and unpredictable
By Mark Sabbatini
Juneau Independent
This article has been corrected to note the current debt service mill rate is 1.08, not 1.2.
There’s a good chance Juneau’s government is going to have less money due to voters exempting food and utilities from sales tax, while rejecting a seasonal sales tax meant to boost revenue from tourism, agreed both participants in an election forum Thursday.
There’s strong disagreement, however, on if asking the City and Borough of Juneau to make do with with less is a good thing. One called the city’s finances "lavish," while the other described them as lean with no fat to cut.
Three tax-related ballot measures in the Oct. 7 municipal election were the focus of the forum hosted by the Juneau-Gastineau Rotary Club. In addition to exempting some essentials from the city’s sales tax that’s currently 5% (labeled Proposition 2 on the ballot), another would lower the cap on property taxes to nine mills instead of 12 (Proposition 1). The third would implement a seasonal sales tax of 3% from October through March and 7.5% from April through September (Proposition 3)
City leaders say the sales tax exemption could result in $10 million or more in lost revenue annually, but the seasonal sales tax would essentially make up the difference. Both participants at Thursday’s forum questioned voters’ willingness to pass both measures.
"The biggest challenge is if the second ballot measure passes and the third fails, and I think there's a good chance that that will happen," said Michelle Bonnet Hale, a former deputy mayor. She urged people to vote for exemption only if they also favor the seasonal sales tax because "if you don't services will have to be cut, or the budget reserve will have to be tapped. But as I’ve said, that (reserve) will not last long."
Propositions 1 and 2 were placed on the ballot via petition efforts by the Affordable Juneau Coalition, which is opposing the seasonal sales tax placed on the ballot by the Juneau Assembly. Joe Geldhof, a local attorney and member of the coalition, said he believes the sales tax exemption will pass and "the Assembly should have adopted it years ago."
"I don't think the shape-shifting seasonal sales tax is going to pass," he added. "Most people, they don't get it. It seems gimmicky."
Opponents of the seasonal sales tax note it will be an overall increase when averaged out during the year, of 5.25% vs. the current 5%, and impose a hardship on locals making large summer purchases such as building supplies. Hale said the average Juneau family should save a few hundred dollars a year overall if Propositions 2 and 3 both pass.
The three Assembly incumbents seeking reelection this year are, like Hale, warning that passing the exemption without also passing the seasonal tax means significant cuts will be needed to a municipal budget of about $200 million. The city is already holding back 60% of its grant funding to community organizations — involving dozens of entities ranging from the Juneau Arts and Humanities Council to the Downtown Business Association — pending the outcome of the election.
Geldhof said there’s plenty of cuts the city can make to its budget without hurting critical programs such as public safety and streets, or popular ones such as libraries and Eaglecrest Ski Area. He said Juneau’s city manager makes more than Alaska’s governor and city leaders are making multimillion-dollar plans to relocate City Hall despite voters twice rejecting a new building.
"We've had a comfortable run with lots and lots of revenue that's resulted in a lavish local government for decades," he said. Now, however, there’s a declining population and chronic workforce shortages.
"Talk to employers around here," he said. "You know, women and young men in their 20s and 30s are upstaking and leaving because housing is cheaper, and there's better opportunities outside of Alaska. They need — way more than somebody like me — a break. They're not getting it from the current city and borough Assembly, which is paralyzed with the need to continue spending on an unsustainable level."
Aside from whether Juneau’s government has more or less sales tax revenue for its budget each year, Hale said her biggest concern is the mill rate cap in Proposition 1 even though it likely will only affect about $1 million in next year’s budget.
"One reason for that opposition is simply the chaos of the times that we live in," she said. "We've been undergoing state cost-shifting to municipalities for many years, and quite chaotic state lawmaking, and now we have chaos at the federal level in this time of great uncertainty. To cripple the Assembly in setting the priorities for Juneau has me very gravely concerned."
The mill rate is set by the Assembly each year based on assessed values of properties and the amount of funding necessary for a balanced municipal budget, Hale said. Among the annual considerations are extra costs such as flood mitigation, as well as ensuring sufficient reserves exist for unanticipated or emergency situations.
The current mill rate is 10.24, with 1.08 mills of that for debt service to pay off existing bonds and loans. Proposition 1 exempts debt service from the nine-mill cap, so supporters note the current rate would be changed only slightly if the limit was in effect.
"At any time the city and borough Assembly can go out and say, ‘We want to borrow money through a bond,’ and that's not in the cap," Geldhof said. "The cap on the mill rate is designed to maintain the status quo and it will."
At the same time, city leaders should be thinking differently about what money needs to be spent on, Geldhof said.
"The premise here is we have to maintain the existing revenue structure for the city and borough, as if everything in the budget is great," he said. "The City and Borough of Juneau Assembly is actually out of touch in some regards with the electorate. That's why you have ballot measures from the Affordable Juneau Coalition."
The city is scheduled to mail ballots to all registered voters in good standing on Friday, with ballot drop boxes opening to receive ballots on the same day. An election forum featuring candidates for Assembly and the Juneau Board of Education, as well as a presentation on the ballot measures, is scheduled at 7 p.m. Friday at the KTOO studios that will be livesteamed by the station.
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
