Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

Haines Borough Manager Debra Schnabel will prepare next year’s budget without incorporating Gov. Mike Dunleavy’s proposed spending plan that would cut an estimated $1.7 million of state revenue to the borough.

“Basically, the assembly would like me to start looking at things that could be cut, small and big, but we are not going to develop a budget that has a strong deviation from what we are doing now. We’re not going to be responsive to the governor’s proposed budget that cuts people or programs,” Schnabel told the CVN this week. “That will come after the budget is set by the legislature. Hopefully that will happen before June 15.”

Last year’s $13.6 million budget included spending from fund balances, hiring additional employees and infrastructure improvements to facilities such as the pool.

At a meeting last week, assembly members told Schnabel how they’d like to see her prepare next year’s budget.

Schnabel proposed three spending scenarios to the assembly that included cuts and tax increases, flat funding, and a budget built on growth. Schnabel recommended a flat funding approach. “We think that the shell budget approach is probably the best because it doesn’t get everybody all stirred up thinking about their programs being cut or their job being cut,” Schnabel told the assembly. “The nervousness right now among the organization can be felt already. Even though we are assured or believe that the legislature will come through for us, the insecurity on the part of the people who work of the government, who work for us, is felt.”

Assembly members Will Prisciandaro and Heather Lende said they wanted to see a spending plan that is similar to this year’s, but prepare for property tax increases and reallocating the 1 percent sales tax revenue from tourism and economic development to the general fund.

A 2003 voter initiative capped the property tax rate at 10 mils by a margin of six votes. The townsite is currently taxed at 9.49 mils.

“I like the idea of a shell budget, but I also think concurrently we should plan for sales tax adjustments to reallocate to the general fund, and I think we should increase the property tax levy cap,” Lende said.

Lende also said Dunleavy’s proposals are a draconian response to a “manufactured political crisis.”

“It’s pretty clear when we’re giving away $1.9 billion in permanent fund extras and we have a $1.6 billion problem,” Lende said.

Assembly member Brenda Josephson disagreed and said Dunleavy’s budget proposals are a response to a drastic fiscal deficit. “What’s happening this year is not just that we’ve got a new governor who’s really mean and wants to cut everything.”

Josephson favored Schnabel’s hunker-down approach. She said the assembly must make cuts to the local budget if they also plan to raise taxes. She proposed that the borough cease funding the Haines Sheldon Museum, and encouraged museum staff to work with the Chilkoot Indian Association to find federal grant funding to pay for the museum.

“I don’t think there’s not going to be much tolerance from the public if we’re not cutting and raising taxes just to cover. We’ve got to have some cuts,” Josephson said. “The museum has a quarter-of-a-million-dollar budget. I think it would be a really good fit if we could divest of the museum and work with CIA.”

Assembly member Stephanie Scott preferred flat funding, and said the assembly can always change the budget after the legislature and Dunleavy finalize the state budget this summer. “It’s also a message to our governor that we don’t like what he’s proposed,” Scott said.

Assembly member Sean Maidy said regardless of what happens at the state level, the assembly and tax payers need to identify where cuts can be made. “We should take the approach of finding out what quality of life services that we have that are not breaking even or even coming close and see how essential those quality of life services are,” Maidy said.

Similar to Lende, assembly member Will Prisciandaro said he prefers flat funding this year, but that the assembly should consider giving voters a chance to raise the property tax cap beyond 10 mills. “I think because the property tax cap was voted in, I think we should give them a chance to see if we want to increase it. It gives us the ability to move it up in the future,” Prisciandaro said.

He added that the assembly should also consider sales tax reallocation, and marijuana and alcohol taxes.

Assembly member Tom Morphet was excused from the meeting.