State prepares to dodge responsibility, leaving CBJ with $7.1 million budget hole

The House Finance Committee on Wednesday voted to eliminate the school construction debt reimbursement program, shifting the cost entirely to local communities. For the City and Borough of Juneau, that means a direct budget hit of $7.1 million this year, and an additional $16 million in the next five years. The program was also eliminated in the governor’s proposed budget.

“It’d be one thing if the state didn’t have money. But they do. This is just an intentional choice to force municipalities to do what they won’t do, which is to raise taxes,” City Manager Rorie Watt said. “Eliminating payment of school debt shifts the burden onto local tax payers, and raises the cost of living and the cost of doing business at the local level without providing any new tools to help us solve the problem.”

For decades, the State of Alaska and local governments have shared the cost of major school construction, like building new schools or improving aging ones. The program in Juneau is currently paying off debt incurred from projects like remodeling Auke Bay Elementary School and Sayéik Gastineau Community School. The state picks up 70 percent of the debt on these voter-approved projects and taxpayers pay the rest. Now, the governor and House Finance want to take the state’s responsibility for the past agreements down to zero.

“It would be an Assembly decision on how to respond to this cost shifting, but we’d likely be considering a raise in property tax and a reduction of some public services. As an example, if we solely just looked at a property tax increase to pay the state’s portion of the school debt this year, it would mean a 15 percent tax increase,” Watt said.

If you expect to the state to pay its share of school construction costs, Watt encourages residents to contact lawmakers from across the state.

For more information, contact the City Manager Rorie Watt at 586-5240 or [email protected].