“Here we go,” is what borough manager Alekka Fullerton told assembly members at a meeting Tuesday, marking the start of budget deliberations. 

The manager’s budget released at the start of this month, proposes holding the borough’s spending plan roughly in line with last year, with a decrease to property tax rates largely made-up for by a projected increase in sales tax revenue from the new seasonal sales tax rate. 

War in Iran, however far away from the realm of municipal government, could throw a wrench in the works: the town is bracing for skyrocketing fuel prices and higher shipping costs for goods across the board, and over 500 residents have signed a petition asking the borough to cut taxes in response to the cost-of-living increase. 

That discussion will play out at a town-hall Wednesday, scheduled for just after press time this week, and at the next few assembly meetings. 

Simultaneously, the borough assembly is starting their process of editing the manager’s plan, including looking for potential spending cuts, many assembly members have said. 

Early deliberation is broken down by different sections of the budget, like Tuesday’s meeting, which covered the areawide general fund. 

What does it mean for the budget to be broken down into funds?

Borough services are largely split up and paid for by the populations they serve. The general fund encompasses services that are meant to benefit everyone living within the borough’s boundaries — services like the school, which any student in the borough may attend. 

With the broadest benefits, the general fund is paid into by broad funding sources that don’t come from just one specific area in the borough. For instance, roughly 43% of the general fund is expected to be paid for by property tax this year. That’s specifically the portion of the property tax paid equally by all borough land-owners — 5.74 mills in the manager’s proposed budget, or 0.574% of a home’s value. 

It’s slightly confusing, given that residents in the townsite do pay a higher property total property tax rate, proposed by the manager at 10.09 mills for the upcoming year. That extra chunk of property tax, however, pays into the townsite service area — meant to encompass services specifically benefitting townsite residents.

Those services include the police department. If there’s an emergency — “basically if there’s a life threatening situation,” Fullerton said this week — the police may operate out Lutak, Mud Bay, or out the highway north of the Airport. Those out-of-townsite residents do contribute to police costs when they pay sales-tax on purchases in-town. Sales-tax revenue is split between multiple funds. But otherwise, the police department’s main duties are in town, funded by taxpayers in town. 

Other services in the townsite service area fund include townsite road-maintenance and borough public works. 

In terms of specific changes to these funds this year, Tuesday’s meeting outlined a picture of persistently creeping costs across the board. For instance, the borough server software, VMWare, has become a subscription service, adding an additional $11,000 to borough technology costs for the upcoming year. 

The assembly will hold a committee-of-the-whole meeting to discuss the townsite service area on Tuesday.