Sales tax revenue exceeds forecast by $1.2 million
September 23, 2021
The Haines Borough generated $1.2 million, or 61%, more in sales tax than it had budgeted for the 2021 fiscal year. It forecasted $1,903,000 in sales tax but raised $3,073,246.
The borough assembly will discuss how to spend the surplus at its meeting on Tuesday, Sept. 28.
“Part of the reason for that is no one knew what was going to happen in 2020. COVID was just hitting when we were making the budget,” said the borough’s chief fiscal officer Jila Stuart. “We didn’t know if cruise ships were coming or not. We didn’t know how long things were going to get shut down. It was really an uneducated guess. It turns out it was on the conservative side.”
Although it exceeds expectations, the revenue generated in the 2021 fiscal year (FY21), which ended in June, is less than in past years. The borough took in $3,380,335 for the 2020 fiscal year (FY20) and $3,679,418 the year prior.
Anticipating a loss of revenue during the pandemic, the borough staff initially proposed a FY21 budget with a 40% decrease from 2019 revenue, but the assembly urged a more conservative reduction of 50%.
“For a combination of reasons it didn’t turn out to be the worst case scenario,” Stuart said. An influx of federal pandemic dollars, including increased unemployment payments, CARES Act money and income-tax rebates, likely helped sustain spending in Haines, she said.
The borough also generated more revenue from online sales due to an ordinance introduced last year that charges tax on online purchases from companies like Amazon and Netflix. Stuart said high inflation this spring also might have contributed to the higher-than-expected revenue.
Interim borough manager Alekka Fullerton said at the Sept. 14 assembly meeting that she would like to see some of the $1.2 million go toward the training and travel budget for borough staff. That funding has been cut significantly in the last two years. The assembly budgeted $157,247 for employee training and travel in FY19 and $159,535 in FY20, but only $80,510 for FY21 and $49,315 for FY22.
Fullerton said she also would like to see some of the additional sales tax revenue for landscaping at the harbor, which could cost $70,000 according to an estimate by Juneau-based Corvus Design.
The assembly introduced a draft ordinance to add items to the borough’s current budget. There will be public hearings on the ordinance at the next two assembly meetings, on Sept. 28 and Oct. 12.
The FY22 budget, which was adopted in June, anticipates netting 65% of 2019’s revenue. At the time the budget was written, officials and staff suspected a slight increase in revenue from FY21, which was tracking at 60% of 2019 (although the final number exceeds that percentage). The predicted 5% jump is due to the return of tourists and small cruise ships this summer, the highway project, Constantine’s summer work program and the return of large cruise ships early next summer, according to the budget.
Another area that generated more revenue than expected is the borough pool. Last year the pool brought in 40% more money than in previous years. Its monthly revenue averaged $4,645, compared to $3,341 and $2,534 per month in FY20 and FY19, respectively.