Borough budget:
$14 million in 2010

By Jessica Edwards

The Haines Borough Assembly Tuesday took a first look at its proposed $14 million budget for the coming year, which includes a slight tax increase for borough property owners to balance an expected decline in state and federal revenues, and increased spending on wages.

The next budget meeting is scheduled for 5:15 p.m. Tuesday, prior to the regular assembly meeting at 6:30 p.m. The assembly will take an in-depth look at budgets for the school district, library, museum, community youth development program, and parks and recreation.

“We have worked hard to provide a balanced budget, but admittedly, our proposal has done so at the expense of a slight increase to the resident’s tax burden,” said borough manager Tom Bolen.

The borough passed a $12.6 million budget for 2009 and $8.26 million budget in 2008. The $1.4 million projected increase in the 2010 budget reflects major capital projects as well as increased borough wages.

General fund expenses, which reflect borough spending on operations and wages, are projected at $5,607,858 in the manager’s budget, an increase of $374,826 over last year.

Under the spending plan, taxes would increase slightly borough wide, with the base mill rate rising to 5.81 from 5.63 last year.

Instead of raising taxes, the assembly could instead dip into the borough’s $4.4 fund balance, a pot of money comprised of years’ worth of unused sales and property tax and money from outside the community, said borough manager Tom Bolen.

In the townsite, a proposed hike in property taxes would bring rates to 11.57 mills, up from 11.26 last year. The increase overshadows retirement of debt burden of .97 mills from paying off the Port Chilkoot Dock and water and sewer projects.

Besides a proposed increase in the base rate, service area rates for the townsite would go up slightly due to declining interest income on townsite service area fund reserves and a $30,000 increase in the police budget.

Townsite mill rates have decreased the past three years. Mill rates were 13.13 in 2007 and 12.26 in 2008.

Residents outside the townsite would see mill rates of 8.48 under the spending pla, up from 8.42 last year. Residents in road maintenance service area residents would also see modest hikes across the board with two exceptions.

The proposed mill rate for Riverview RMSA jumps from 10 mills to 13.28, and Eagle Vista RMSA would go up to 12.70 from last year’s 11.71 as a result of a borough action this spring allowing the subdivisions to tax themselves above the 10-mill cap to pay for snowplowing services.

On the revenue side, assessments of property improvements outside the townsite increased the total valuation $13.3 million or six percent, for a total boroughwide valuation of $247 million.

Chief fiscal officer Jila Stuart said the lands department anticipates a 6 percent increase again next year when townsite land and property assessments were updated.

Assemblyman Jerry Lapp said he would be in favor of eliminating personal property tax, which comprises about seven percent of the borough’s real and personal property tax revenue, or $17 million. Real property tax makes up the rest, bringing in about $230 million in revenues.

Personal property tax levied on businesses requires owners to claim equipment and infrastructure.

Bolen said because there was no oversight system or accountability for personal property claims, personal property taxes “just don’t seem like a fair kind of tax.” He said he’d be more in favor of raising sales tax, which everyone pays.

The proposed budget reflects wage increases with the hire of a borough facilities director at $80,000, a $20,000 increase in police pay, $16,000 increase for dispatch pay, the hire of a part-time information technologies employee at $19,600, and a proposed economic development position at $68,000.

Proposed borough funding for the school goes up $160,000 this year, while federal secure schools funds, currently funding $450,000 of the school’s budget, are projected to decrease 10 percent per year until they expire in 2012.

Assembly member Doug Olerud said the school board and administration should be considering ways to trim the school’s budget in anticipation of losing secure schools funding. “Everybody’s known it was going to end at some point, yet they keep passing the same budget year after year. The school board needs to rein in their costs.”

Assemblyman Steve Vick said it would be prudent for borough to plan for the sunset of secure schools funding and asked if money could be set aside for that.

Bolen said future economic growth, including through increased cruise ship tourism, construction of a natural gas pipeline, and mineral export through Haines, would help offset the loss of federal dollars.

Sales tax revenues are projected at 2008 levels.

Bolen said he’s banking on construction activity associated with numerous capital projects to make up for forecasted declines in tourism. Even with a national economic downturn, the budget projects increased sales tax revenues at $475,000 up from $450,000 projected last year.

Chief fiscal officer Jila Stuart said the 2010 projections were flat with 2008 actual sales tax revenues, with the difference made up by inflation. “We’re betting the drop in (tourism) revenues will be offset by two years’ inflation,” she said.

Construction projects include $4.3 million for float and electrical replacement at Portage Cove Harbor; Haines street paving, $1.2 million; Portage Cove waterfront improvements; and replacement of the water tank on Young Road. The state Department of Transportation has two projects planned as well.

A federal payment to the borough in lieu of taxes on federal lands is expected to increase to $340,000. The borough expects to receive $598,000 in state revenue sharing this year, thought the state revenue sharing money could decrease annually and disappear by 2013 if state lawmakers don’t appropriate additional monies.