Juneau holds back 60% of grant funds to recipients pending outcome of ballot measures to limit taxes

Remaining funds to arts, social service, business, health and other grantees may not be available if voters OK proposals, city says

Kids race during a July 4, 2025, at Savikko Park. The Juneau Festival Committee and Douglas Fourth of July Committee are among dozens of organizations and individuals that receive annual grants from the City and Borough of Juneau, a portion of which are being held back this year pending the outcome of two tax-related ballot measures in the Oct. 7 municipal election. (Mark Sabbatini / Juneau Independent)

The city is holding back 60% of its grant funding to organizations and individuals for the fiscal year that began July 1, stating those funds may not be available if ballot measures restricting sales and property taxes are approved by voters.

That decision means, for example, Theater Alaska will get $4,800 of the $12,000 it expected to receive and artist Andrew Heist will get $400 of the $1,000 he expected. Among the dozens of recipients and distributing agencies are the Juneau Community Foundation, Juneau Arts and Humanities Council, Downtown Business Association, Alaska Heat Smart, Juneau Festival Committee and Parents For Safe Graduation.

Reggie Schapp, JAHC’s operations manager, said during a board meeting Wednesday evening that grants the arts council distributes were "ready to go" when the unexpected notification of withheld funds from the city arrived yesterday and set off emergency discussions.

"The ones I worry about the most are individual artists," she told board members. "I called (city officials) to ask if there's any way I could shift funds around and they said no — 40% across the board."

A slide presented by Schapp shows 17 individuals awarded between $500 and $1,000, who will instead receive $200 to $400 for now. Fifteen organizations slated to get between $1,000 and $15,860 in city grants through JAHC will instead get 40% of those amounts.

The remaining 60% won’t simply vanish if one or both ballot measures pass. The Assembly, which approves the budget, would have to approve adjusting the grant funding — and there are other alternatives such as modifying other portions of the tapping and tapping reserve funds.

"We just have a very short section in our memorandum of agreement with our grant agencies that says that we will be releasing funds in stages due to the uncertainty of the budget with the ballot propositions," City Manager Katie Koester said in an interview Wednesday. "So (we’re) just putting them on notice that if we get into a situation where we're going to need to look at budget cuts that that is a possibility."

The ballot measures include capping property taxes (excluding debt service) at nine mills instead of 12, and exempting utilities and essential food from the city’s 5% sales tax. City officials say both measures would cost the city a total of $10 million to $12 million in lost revenue annually. The city funded about $10.7 million in grants during the past fiscal year.

The memorandum of agreement from the City and Borough of Juneau to grantees states 40% of the award amount will be advanced "on July 1, 2025 or upon the signing of the Agreement, whichever is later." The remaining 60% "will be disbursed no later than January 9, 2026" — but those funds are not guaranteed.

"CBJ faces the potential of significant revenue loss in October 2025 due to a citizen initiative and charter amendment that will be on the ballot," a memorandum sent to JAHC states. "In the event of a decline in CBJ revenue, CBJ reserves the right to modify and/or cancel the grant awards at any time during fiscal year 2026. Grantees will be notified of any modifications or cancellations by no later than November 14, 2025."

Both ballot measures are sponsored by the Affordable Juneau Coalition, whose founders say a primary goal is to rein in non-essential city spending that is making it harder for residents to afford essentials such as food and housing.

"When we have a thriving, affordable, safe community, and people have money in their pockets, they can support the arts, the nonprofits, the trails, the symphony, all these other things," Angela Rodell, a member of the coalition, said in an interview Wednesday. "When individuals and volunteers and donors no longer have that money, and it becomes government sponsoring it, everything gets unsustainable and upside down."

Rodell noted the Assembly as part of its recent budget process passed significant increases in utility rates for each of the next five years, as well as increasing the mill rate to 10.24 compared to last year’s 10.04 mills. She said city leaders also are willing to fund items such as $9 million to demolish and redevelop Telephone Hill, and $1 million to help design a new civic center that voters have indicated they don’t want.

Also, she noted, city grant funding has increased significantly in recent years. A city spreadsheet shows about $3.3 million in grants were funded in fiscal 2013, $6 million in fiscal 2017 and $9.6 million in fiscal 2021 (when COVID-19 meant extra funds for many types of grants existed). Funding fluctuated considerably the past three years with $6.3 million in fiscal 2023, $11.7 million in fiscal 2024 and $10.7 million in fiscal 2025.

Koester, when asked if the holding back of funds was a ploy to get people to vote against the ballot measures, said "the language doesn't imply that the funding will be cut at all."

"The language just says we want you to be aware that there will be impacts if this passes and we want to make sure to preserve the Assembly's authority to manage their budget as they have the responsibility to do," she said. "So it's not an ‘If this passes the city won't fund this.’"

Both ballot items would take effect 30 days after enactment and certification of the Oct. 7 municipal election is scheduled Oct. 21. That means nearly four months — or one third of the fiscal year — will have elapsed, meaning the loss to the city for the current budget cycle will be significantly less than the $10 million to $12 million annual predicted total.

The city also has enough reserve funds to, in theory, cover revenue lost for a year if both ballot measures pass. However, such funds are intended for emergencies and other unexpected contingencies, and some are designated for specific purposes such as building/upgrading new city facilities.

Many of the organizations receiving city grant funds this year are also facing other reductions imposed largely at the federal level by the Trump administration and Congress. KTOO, for instance, is awaiting Congress’ action on Trump’s request to cancel $1.1 billion for public broadcasting, which the station said could affect about one-third of its annual operations funding.

In a way the city’s announcement of held-back funds is useful because "we want that heads up…(and) in turn we will have to be fiscally responsible in terms of how we put our budget together," James Bibb, interim chair of JAHC’s board of trustees, said in an interview Wednesday. He said the local situation is merely part of a larger shift that includes uncertainty about state and federal support.

"We're starting to realize internally that with JAHC as a hub for many artists that these next few years, until we get a bit of predictability and momentum, it's going to be a little bit different," he said. "We can't just assume that things are going to be the status quo."

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