Skagway draft budget would more than double the clinic's sales tax subsidy to $4.3 million

Skagway's borough manager has proposed more than doubling the sales tax money that keeps the town's clinic running.

Emily Deach sent her draft 2027 budget to the mayor and Borough Assembly on Oct. 16. It would give the clinic about $4.3 million in sales tax money, up from about $2 million in this year's budget.

Under the draft, the clinic would take in less and spend more. Its own revenue would drop 29%, to about $3.2 million. Spending on temporary providers, known as locum tenens, would rise 80%, to about $1.7 million. In all, the clinic would spend about $7.5 million.

Clinic staff had asked for even more, about $4.7 million. Deach writes that she and clinic Executive Director Albert Wall "worked to get the Clinic budget down to a 20% increase," from the staff version's 27%.

The clinic has run over budget before. In an April memo to the Assembly's Finance Committee, Wall wrote that the clinic exceeded its 2025 budget by more than $1.3 million.

Emergent visits rose 195% from 2024 to 2025, he wrote, with most of the increase from "walk-in patients off the tour boats and from the seasonal workforce population." Those patients are costly to treat, the memo says, because the clinic can't fully bill for emergency room services, some have out-of-network insurance and some seasonal workers leave without paying.

Deach's memo calls the clinic and capital projects the Sales Tax Fund's "pressure points." The fund is expected to bring in $13 million next year. Without deep cuts to what it pays for, including the clinic, utilities and capital projects, she writes, the borough would have to dip into sales tax reserves.

The draft sends about $8.1 million to capital projects, but only to ones already underway, and the borough continues "to delay critical deferred maintenance projects for municipal facilities and the School," Deach writes. The biggest project is the second phase of rockslide mitigation, at $3 million.

The school district's operating contribution would drop 8% to 9%, to about $2 million. The sales tax money used to hold down property taxes would fall 24.3%, to $2.5 million.

Elsewhere in the draft, police spending would rise 17%, not counting grants, with three officers planned. The port and small boat harbor would run a surplus of more than $11 million.

The Assembly of the Whole Committee took up the draft Oct. 21.