The Haines Borough manager’s 2020 proposed budget released this week amounts to nearly $18.7 million in total spending using $426,508 of borough reserve funds and an increase in property tax.
Last fiscal year, the borough’s budget spent about $13.4 million. This year’s budget would be similar if not for a spending increase that reflects $6.1 million worth of Alaska Department of Fish and Game and other outside revenues that will pay for the construction of a sport boat launch ramp.
Gov. Mike Dunleavy’s proposed state budget, if approved, would cut significant funding to school districts, withhold fish tax revenue and cancel the school bond debt reimbursement program- losses that would cost the Haines Borough about $8 million.
Under the school debt reimbursement program, the borough has received an annual 70 percent contribution rate from the state to pay for the cost of building the school in 2005. If the program is cancelled, The Haines Borough is on the hook until 2027 to pay the bond back $1,195,375 each year.
Borough manager Debra Schnabel’s proposed budget offsets the potential funding loss by raising townsite mill rate to 9.69 with an additional 3.99 mills in debt service for a total mill rate of 13.68. In 2003, voters approved a 10-mill property tax cap, which doesn’t apply for taxes levied to pay debt services.
Under the current budget, a homeowner with a house valued at $100,000 would be responsible for paying $399 per year for construction bonds.
If the program survives the budget cut, Schnabel said that the mill rate would drop to 10.93.
The budget reflects an anticipated 8 percent growth in sales tax revenue, up from $587,400 in 2019 to $628,000 in 2020.
Personnel costs have been frozen as union negotiations are ongoing, Schnabel said. However, the budget shows a payroll burden increase across the board from previously allocated state money, Schnabel said. Last year, the borough received a $91,500 Public Employees Retirement System (PERS) refund from the state that was allocated as a one-time reduction to payroll last fiscal year.
The Haines Borough School District will be flat funded at $1,817,000 in the proposed budget from the borough.
Department budgets for police, dispatch, public works, museum, library, information technology, land assessment and planning, finance and tourism all increased in this year’s draft budget.
Police standby time has increased by $16,000 to reflect the Nov. 16 directive by the Borough Assembly for townsite police to respond to urgent calls outside the service area. Schnabel said that police have exceeded budgeted standby hours for the past two years. An increase in insurance costs also contributes to an overall budget increase of $32,253.
Public facilities, administration, the Haines Borough Assembly and economic development departments will see a decrease in borough funding under the proposed budget.
Schnabel proposed a $150,000 transfer from townsite funds to capital improvement projects to paint the public safety building exterior. Last month, the building was denied a grant that would have paid for improvements.
To generate additional borough funding, Schnabel suggested enacting a seasonal sales tax that she said could bring the borough an additional $200,000, reducing property tax exemptions or cutting programs.
Schnabel will introduce the draft budget to the borough assembly on Tuesday, April 9 at 6:30 p.m.