JEDC: ‘Yes-yes-no’ on ballot propositions is $944 a year per household; ‘no-yes-yes’ means locals ‘pay less tax and get more city service’
- Mark Sabbatini
- Oct 6
- 5 min read
Organization, in revised study due to errors, states loss of city revenue from ballot propositions may directly cost residents and businesses as well
Note: The original version of this story was removed from this website last week due to an error in the JEDC study that incorrectly cited a tax savings of $468 rather than the current figure of $72 on a $450,000 home if Proposition 1 is approved, according to an updated study released Saturday.
By Mark Sabbatini
Juneau Independent
Juneau will lose about $12.44 million a year and households will get an extra $944 a year if voters approve a property tax cap and sales tax exemption, while rejecting a seasonal sales tax, in Tuesday’s election, according to a study published Saturday by the Juneau Economic Development Council.
That changes to a $1.34 million gain for the City and Borough of Juneau, and an extra $461 for residents, if the property tax cap is rejected, and the sales tax exemption and seasonal sales tax is approved, according to the current version of the study dated Oct. 4. Three prior versions published Sept. 30, Oct. 1 and Oct. 2 contain financial errors that JEDC Executive Director Brian Holst said Monday were inadvertent and have been corrected.
The ballot propositions and impacts estimated by JEDC:
• Proposition 1 (cap property tax at nine mills): $1 million loss for CBJ; $72 savings from the current tax of $4,608 on a $450,000 home.
• Proposition 2 (exempt food/utilities from current 5% sales tax): $11.5 million loss for CBJ; $872 savings for households paying roughly $2,000 in sales taxes now.
• Proposition 3 (seasonal sales tax of 3% from Oct.-March, 7.5% April-Sept.): $12.88 million gain for city; $411 more in taxes for an average household.
Those figures differ slightly from amounts provided by the city in its official election guide (most notably in Proposition 3, with CBJ estimating an $11.5 million revenue gain). But the JEDC study also offers assessments of the outcomes of all scenarios for the three ballot propositions — practical as well as fiscal — on businesses and households.
For instance, the outcome of a "yes, yes, no" vote that hits the city’s coffers hardest — which some officials have said appears to be a likely scenario — forecasts both positive and negative impacts for business and residents.
"Some commercial property owners, grocery/utility businesses, and service contracts see benefits," the JEDC study notes. However, "businesses dependent on city expenditures (suppliers/contractors) may be squeezed by public spending cuts."
Meanwhile, for residents, "homeownership and essentials become more affordable. Largest impact for property owners, families, and lower-income households. Long-term, possible cuts to city services may undercut these benefits."
The original versions of the JEDC study cited a $468 tax savings for a $450,000 home. Holst said the revised amount of $72 doesn’t affect the study’s general assessments of impacts on businesses and residents.
Juneau Assembly members, including three seeking reelection, are advocating for a "no, yes, yes" vote. The JEDC study offers shorter summaries of those impacts since the financial amounts involved are smaller.
"Grocery/utility sellers may see demand rise. Businesses handle seasonal changes in sales tax rates," the study notes. For residents, "savings on tax exemptions are offset by increase in city sales tax. Residents pay less tax and get more city service."
However, the seasonal sales tax is being opposed by the Greater Juneau Chamber of Commerce, which states adjusting rates twice a year will be a significant burden.
"Chamber members noted that having to alternate between two tax rates each year would add significant operational costs for businesses, requiring point-of-sale changes, accounting adjustments, and billing modification," a statement by the chamber notes. "These impacts would be particularly challenging for merchants selling services as opposed to goods. While the augmented seasonal tax would affect all businesses, it would especially impact the construction, mining, recreation, and visitor industries, which are essential to Juneau’s economic health and well-being."
A notable finding in the JEDC study is the claim that a yes vote on all three propositions offers the "broadest combined relief for residents" — even though it’s a smaller net gain to their bank accounts than the "yes-yes-no" vote advocated by the Affordable Juneau Coalition, the sponsor of the first two ballot measures.
"The broadest relief is because…the only one of these that brings income into Juneau that wasn't already in Juneau is a seasonal sales tax, because that brings in revenue from outside," Holst said in an interview Wednesday. "So that is a net increase. But there's a little bit of what you do with the additional income that matters. And we're not commenting on what the city would do with additional income or not, but if there's not additional income then there's going to be cuts to services, presumably…If the city's going to get more revenue then they’re going to have the ability to provide more services. So that's the upside of three that we're talking about."
But while that might be considered an argument in favor of the seasonal sales tax, the study also looks at similar taxes already in effect in other Alaska cities and elsewhere, and notes there can be adverse impacts.
"Tourism is vital to Juneau’s economy, and it will be important to avoid poorly structured taxation or spending policies which could harm the very residents who make this city function year-round," the study notes. "Fairness, transparency, and reinvestment into the community are essential to a sustainable future."
The study is not intended to advocate for or against any of the ballot measures, Holst said.
Holst also said the initial versions of the study published Tuesday and slightly revised Wednesday contained an error that counted some seasonal sales tax revenue twice — thus indicating it would result in a $20.2 million revenue gain instead of the now-forecast $12.8 million — and was removed from JEDC’s website and replaced by the version published Thursday. Those first two versions also contained the property tax error subsequently corrected in the update released Saturday.
A theme invoked throughout the study is regressive versus progressive taxes, noting "regressive" flat tax rates in Juneau mean lower-income households pay a higher percentage of their income for essentials such as housing and food than higher-income households. "Progressive" rates, such as those found in federal income taxes, adjust rates upward according to what people earn.
Juneau offers some breaks for seniors and disabled veterans through property tax exemptions for up to $150,000 in assessed values that currently apply to nearly 30% of residences, according to JEDC.
"This number of exempted properties is expected to increase as Juneau residents age, shifting more of the tax burden onto younger homeowners," the study notes. "A potential ballot initiative capping the mill rate at 9.00 also risks removing flexibility for future fiscal scenarios."
The study details other exemptions in effect elsewhere that could be adopted, but notes either the city would lose revenue or rates would rise for property owners not receiving those exemptions.
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
