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 the city still faces a projected fund balance deficit of $687,000 for fiscal year 2027 after additional one-time budget actions.

The committee reduced Travel Juneau's hotel bed tax funding by $400,000 on a recurring basis in a 5-4 vote, cutting the destination marketing organization's budget from roughly $1.27 million to about $867,000. The committee also reduced the city museum's budget by $261,000 recurring, eliminated $75,000 from the landscape budget, and approved a one-time $300,000 reduction to the Juneau Economic Development Council grant.

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, noted during the meeting that if the committee took no action on pending budget items and moved forward only the sales tax ordinances, the city would be looking at an operating deficit of $8 million.

Hughes-Skandijs 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.

The committee began the evening with a projected ending fund balance of negative $1.7 million. Later in the meeting, after the committee approved additional one-time actions, Rogers confirmed the updated projected fund balance stood at negative $680,783.

The committee removed $2.72 million from the restricted budget reserve and $1 million from the Gaston Avenue widening and turnaround project from the capital improvement program, 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. The project remains in the capital plan.

Sales tax collections came in $2.3 million higher than projected for the January-March quarter, Rogers reported. The city collected $2.3 million in exemptions from the new food and utility sales tax exemptions, close to the $2.7 million estimate. 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, with a potential increase of $6.8 million. Assembly Member Neil Steininger said he would reach out to the hospital to confirm the arrangement was workable before the full Assembly vote.