Juneau Assembly Finance Committee cuts $736,000 in recurring expenses, faces $687,000 deficit

The Juneau Assembly Finance Committee cut $736,000 in recurring expenses from the city's operating budget Wednesday night but still faces a projected fund balance deficit of $687,000 for fiscal year 2027.

The committee reduced Travel Juneau's hotel bed tax funding by $400,000 on a recurring basis in a 5-4 vote. The destination marketing organization's budget dropped from roughly $1.27 million to about $867,000. The committee also cut the city museum's budget by $261,500 recurring and eliminated $75,000 from the landscape budget.

Finance Director Jeff Rogers told the committee that ballot measure revenue losses and soft sales tax collections had contributed to the city's budget challenges. Assembly Finance Committee Chair Alicia Hughes-Skandijs, who represents District 1, said the committee faced difficult choices. She added that whoever sits in these seats next year will have to make even harder cuts to close an $8 million gap.

Budget adjustments

The committee removed $2.72 million from the restricted budget reserve and $1 million from the Gaston Avenue widening project, directing both amounts to the general fund. A motion to remove the Lemon Creek multimodal path project, budgeted at $1.5 million, from the capital budget failed 4-5.

Sales tax collections came in $2.3 million higher than projected for the January-March quarter, Rogers reported. The higher-than-expected collections were attributed to inflation.

The committee approved a motion expressing that Bartlett Regional Hospital should pay $247,000 for the Gastineau Human Services Substance Use Disorder Treatment Program while maintaining the hospital's $200,000 recurring subsidy for home health and hospice services. Deputy Mayor Greg Smith noted Bartlett's fund balance is projected at $64 million for fiscal year 2026. Assembly Member Neil Steininger said he would reach out to the hospital to confirm the arrangement was workable before the full Assembly vote.

What was rejected

The committee rejected several proposed cuts, including a $600,000 reduction to the landscape budget, a $250,000 cut to the affordable housing fund, and a $100,000 reduction to the Juneau Arts and Humanities Council grant. The committee also voted down a proposal to lease the Douglas Fire Station after Fire Chief Rich Etheridge warned the move would drop the city's Insurance Services Office rating from 3 to 4, increasing commercial insurance rates by 5 to 15 percent.

What happens next

The committee directed staff to draft a new ordinance for a water and wastewater bond of up to $9.4 million and to introduce a school bond of up to $50 million. Both items will be discussed at the June 3 Finance Committee meeting before introduction to the full Assembly on June 8.

The full Assembly will consider the budget amendments at its June 8 meeting. The committee's decisions are not final until the full Assembly votes.