Planning for the 2017 fiscal year budget went smoothly for City Finance Director Bob Bartholomew and his staff. Planning for the 2018 fiscal year, because of uncertainty at a state level, isn’t so easy.
Bartholomew recalls that between three and four years ago, the city “found itself in sort of an unsustainable budget shortfall,” facing a projected budget shortfall of upwards of $6 million. They made the necessary adjustments and overcame that in a two-year period, and came into the 2017 fiscal year planning process with a balanced budget.
Now, as Bartholomew explained to the Assembly Finance Committee on Wednesday evening, the city faces a $1.2 million projected shortfall for the 2018 fiscal year.
“Now it’s sort of the downfall of the state economics, the state finances that are starting to impact the economy that we think has put us into a small deficit,” Bartholomew said. “We consider this small, but the risk of it getting bigger is why we’re kind of going through a more comprehensive process to address it.”
Uncertainty at a state level has become a theme in recent City and Borough of Juneau Assembly meetings, as planning for a local future is harder to do as the future of the state (especially the state’s budget) is so much in flux.
Bartholomew referred to future state budget cuts as a “wild card” during Wednesday’s meeting, and advised the committee and city manager Rorie Watt not to approve any major changes to the budget until there’s more clarification from the state. Though Watt only spoke for a few moments during the public portion of the meeting, he concurred with Bartholomew.
“We need to be patient and cautious in how we interpret news from the legislature,” Watt said. “There will be wild swings and we need not overreact in the short run.”
Bartholomew recommended that the city turn to both its general government fund balance (savings) and to money from reductions. Bartholomew estimated that CBJ could draw $700,000 from savings and $500,000 from reducing costs and expenditure authority in other areas of the FY18 budget.
The general government fund balance took a hit this past year, but Bartholomew estimated that there’s more than enough room in savings to find the necessary funds.
In the process of putting together the budget for the FY18, CBJ reached out to a variety of citizens to see what was important to them. In total, 169 residents completed a survey and 90 others participated in focus groups in order to determine top priorities. Online participants went through a program that only allowed them to take the survey once, and Bartholomew was present for all of the focus groups.
Those in the focus groups highly prioritized the Juneau Police Department, Capital Transit and libraries, while the online participants said promoting a “quality, family oriented community” was top priority. Mount Jumbo Gym, Eagle Valley Center and City Museum public education ranked near the bottom of the list of priorities in the focus groups.
Deputy city manager Mila Cosgrove was pleased with the engagement and saw that the views of the citizens were in line with the pre-stated priorities set by CBJ.
“By and large,” Cosgrove said, “there was general consensus that the things that we had flagged as essential local government services were indeed essential (to the public).”
Looking to help businesses, seniors
The final point of the meeting came from Assembly member Mary Becker, who asked that there be additional analysis into expanding sales tax exemptions to seniors. In Sept. 2015, CBJ restricted tax exemptions for seniors to “essential” purchases, mostly relating to food, fuel and other basic needs.
“I would like to broaden them and to include some things like paper products and cleaning products and cooked foods from stores, from grocery stores.”
Assembly member Loren Jones objected, commenting that he didn’t think it was a good use of employee time to look further into this. The rest of the committee agreed with Becker’s wishes, however, especially after Bartholomew said it wouldn’t be an outrageously large burden to look into the possibility of expanding the list of exempted items.
That proposed ordinance will be under further discussion at the next committee meeting.
• Contact reporter Alex McCarthy at 523-2271 or alex.mccarthy@juneauempire.com
Finance Director Bob Bartholomew and his staff have their work cut out for them, trying to manage the city’s budget while adjusting to the actions that the state takes. (Alex McCarthy | Juneau Empire)
