Juneau Assembly keeps cut to city museum, raises sales tax cap to $50K as final budget passes

Some Assembly members say not enough cuts made, leaving city facing perilous situation where it may spend all of its reserve funds during the coming year

Residents wait for their opportunity to testify during a Juneau Assembly meeting on Monday, June 8, 2026, about the city budget for next year that the Assembly passed after lengthy debate. (Mark Sabbatini / Juneau Independent)

By Mark Sabbatini

Juneau Independent

The Juneau Assembly kept a series of cuts in place — including reducing operations at the Juneau-Douglas City Museum and Eaglecrest Ski Area, closing the Mount Jumbo gym, and making steep reductions to tourism and economic development funding — while passing the municipal budget for the coming year on Monday night.

The budget also makes reductions and increases user fees in various city operations. It spares some proposed cuts that received considerable public opposition including closing one of Juneau’s two public pools and the Dimond Park Field House, leasing out the Douglas Fire Station, and making further cuts at Eaglecrest that would have put the ski area’s ability to operate during the coming year in question.

In addition, Assembly members significantly changed the city’s sales tax rules by raising the cap on a single purchase to $50,000 rather than $15,000, meaning buyers will pay the current tax of 5% on the first $50,000 of an item or service, with the rest exempt. That change is set to take effect Oct. 1.

The roughly $545 million budget for the fiscal year that starts July 1 includes about $140 million for municipal government functions, with the remainder funding city entities such as Bartlett Regional Hospital and capital improvement projects.

The first draft of the budget introduced in April had an estimated $16 million deficit. Assembly members said Monday that was trimmed to about a $7 million gap in the final draft, due primarily to about $4.6 million in various reductions to departments by the city manager’s office, cutting funds for capital improvement projects, and implementing about $2.5 million in fee/tax revenue measures — not including the higher sales tax cap since the revenue from that is unknown.

Assembly Member Alicia Hughes-Skandijs, right, discusses a proposed change in Juneau’s sales tax code with City Manager Katie Koester, left, and City Attorney Emily Wright during an Assembly meeting at City Hall on Monday, June 8, 2026. (Mark Sabbatini / Juneau Independent)

The shortfall will be covered by the city’s unrestricted fund balance, estimated at $20.7 milllion earlier this spring. However, the Assembly also agreed this spring to use $9.5 million of general funds to repay funding provided by Goldbelt Inc. for a gondola at Eaglecrest, raising concerns that when other spending is factored in the city will have little or no reserves at the end of the next fiscal year.

"Our fund balance right now is one bad sales tax quarter away from having no funds to deal with our operating expenses, let alone a major natural disaster or other disaster," Assembly Member Christine Woll, chair of the Finance Committee, said while members were debating budget amendments during the meeting. "We live in an uncertain world and that's what our fund balance is for, is to make sure we can weather that uncertainty."

Similar concerns were expressed by some other Assembly members during the evening, who noted the city will again face a $7 million deficit next year if spending levels remain the same. Since the reserves may be depleted, they noted, that may mean additional and significant cuts — including those avoided this year — will occur.

Dozens of people filled the Assembly Chambers for the meeting that lasted nearly five hours, with pleas to fully fund the museum being the most common topic among those offering testimony on the budget. The Assembly by a 4-5 vote rejected adding $261,000 to fully fund the museum. That means the museum is set to get about $300,000, which will mean it can remain open, but with reduced staffing and hours.

Museum officials and supporters said the cut will eliminate two full-time positions, leaving a full-time equivalent of 1.75 jobs in place, and result in the cancellation of community programs such as workshops as well as fewer operating hours.

"I'd also like to speak to how difficult it would be to re-up the programming at the museum if we lose these positions," said Michelle Stewart, an artist who moved to Juneau three years ago and called the museum an important part of learning the town’s history and a must-visit site for out-of-town guests. "I understand that the proposed cuts would be for a year, with the goal of re-funding the museum fully afterwards. But those people are not going to be sitting around waiting for their jobs back. We're going to lose institutional knowledge and we're going to lose that continuity that’s important for the museum to continue to exist."

Voting for adding the funds were Maureen Hall, Paul Kelly, Nano Brooks and Neil Steininger. Mayor Beth Weldon, who cast the final and deciding vote against, said Assembly members were asked to make $2 million in service cuts to help narrow the gap and in the end cut about one-tenth of that amount.

"The key thing is we didn't do our job, guys," Weldon told the other Assembly members. "We should have cut more in other places."

The sales tax exemption cap was also subject to extensive discussion. Assembly members rejected by a 3-6 vote, eliminating the cap entirely instead of just raising it, after supporters argued it would allow many of the proposed budget cuts to be avoided. City Finance Director Angie Flick stated in a memo to the Assembly eliminating the cap could generate $6.75 million during the coming fiscal year (since it would be in effect for nine months rather than 12) and up to $9 million the following year.

But concerns about impacts on large purchases such as vehicles, as well as industries such as mining that make large single-item purchases, were voiced by several Assembly members as well as two business executives offering public testimony. Kody Richardson, managing partner at Juneau Auto Mall, told Assembly members his concern included raising the cap as well as eliminating it.

"This is my fear, is that this will create an opportunity for families to use some Alaska Airlines miles, fly to Anchorage, take a beautiful drive down, put their car on a ferry, and come back because it's literally going to save them $1,500 to do that," he said.

A subsequent 6-3 vote lifted the exemption on single purchases to $50,000, above the $30,000 that got initial approval from Assembly members May 28.

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