Borough faces $8.3 million hole

PALMER — To describe the Mat-Su Borough’s budget projections as gloomy might not be an exaggeration.

“Until now, we have tried to be all to everyone,” Borough Manager John Moosey said at Tuesday’s borough assembly meeting, which took the form of a first peek at the Fiscal Year 2014 budget. “It’s come to the point where we have to make some tough decisions.”

The budget seems to be strained in just about every direction. There’s less money carrying over from the previous year. There’s less money coming in from the federal government and from the state. And personnel costs — the bulk of the borough’s costs — are going up.

Assemblyman Warren Keogh did some math adding up all the estimated figures Moosey and finance director Tammy Clayton tossed out.

“We have an $8.3 million difference,” Keogh said. “Which is an $8.3 million problem that we didn’t have to deal with last year if we stay with the same mill rate.”

Borough Mayor Larry DeVilbiss said that was kind of by design.

“Last year we deliberately backed ourselves into a corner,” he said. “We intended to lower our ability to spend money this year. It may be at the expense of being able to offer services.”

He said he’d like to see the borough sell more of its land, land that it originally got from the state.

“That was intended to be a revenue-generator both at the get-go and through infrastructure development,” he said.

The town site he pushed for and got passed at Point MacKenzie, DeVilbiss said, would likely “roll over really fast.”

Assemblyman Darcie Salmon said he’d like to see some more businesses attracted to move here. One possible target to lure north, he said, is the gun manufacturing industry.

“They will put up in our port district in able to be able to export the products that they do in fact create,” he said. “My suggestion is to get the economic development department keeping their eyes on some of these other states that are vey upset with the taxation.”

He also suggested the borough’s bed tax as a possible place to increase revenue. Bed taxes, he pointed out, are a way to capture income from visitors “that come and take part in our beautiful state.”

Assemblyman Jim Colver said that his read on the goings on in Juneau is that the Legislature is decoupling its revenue sharing program from the corporate income tax. The program, which provides millions each year to municipalities like the borough, would, in the current legislation, come out of general fund revenues. Which, Colver said, makes it more vulnerable to budget whims. When belts tighten in Juneau, he said, revenue sharing is one of the first things left on the cutting room floor.

“I think it’s important that we get it tied to some kind of revenue source,” he said. “It’s imperative to our future budgets.”

Finally, the assembly got a suggestion from one member of the public, William Bruu. He suggested suspending for five years a property tax exemption for senior citizens. Bruu noted that he is himself a senior citizen.

“We do represent the most affluent portion of the demographic of this borough,” he said. “Allowing us to just skate along and not pay our way I don’t think is very fiscally sound, nor does it show any political courage at all.”

Contact reporter Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.