Decoding the local government budget process

As citizens, we contribute to our local governments through taxes. Have you ever wondered how these funds are allocated and used to improve our community? Let’s dive into the budget process and shed light on some important concepts, such as areawide and non-areawide taxes, service areas, and the meaning of the mil rate.

The budget process is a crucial aspect of local governance, as it determines how resources are allocated to services and programs that directly impact our daily lives. When more projects are budgeted, more taxes or fees are necessary to pay for those services. Every year, local government officials work tirelessly to create a balanced budget that reflects the needs and priorities of the community.

It is important to know the difference between areawide and non-areawide because the monies cannot be mixed. The government cannot use funds raised by a Road Service Area other than for the roads program in that area; it cannot be transferred to other areas or used to pay for other services. Equally, areawide funds cannot be used to benefit only one group of taxpayers and must be used to benefit everybody.

Another important concept is the mil rate, which is used to calculate property taxes. A mil is one-tenth of 1%; equal to $1 for every $1,000 of a property's assessed value. For example, if your home is assessed at $200,000 and the mil rate is 5, your property tax would be $1,000 (200 x 5). When assessments are higher, the mil rate can be lowered to decrease taxes. Some agencies can raise or lower taxes without a vote of the people, others must ask the voters to approve first. Assessments and appraisals will never match and are not the same thing.

The process typically begins with each department within the local government submitting its budget requests. These requests detail the funds needed to maintain current services and propose new initiatives. The finance department then compiles these requests, adds in projected revenue for the government, and presents a draft budget to the mayor or manager, depending on the type of government.

After reviewing the draft budget, the city administrator adjusts and presents it to the City Council or Borough Assembly. That body then holds public hearings to gather input from citizens and stakeholders, allowing the community to voice their opinions on the proposed budget. Sometimes multiple work sessions and meetings are held, but all governments try to pass it in May or June. The new budget must be approved by July 1 for any funds to be authorized that fiscal year, so any delays impact service delivery.

During these hearings, citizens should understand the difference between areawide and non-areawide taxes. Areawide taxes are those levied across the entire jurisdiction and fund services that benefit everyone. Examples in the Mat-Su are EMS, rescue, schools, planning, and platting. On the other hand, non-areawide taxes are levied in specific areas or districts within the jurisdiction to fund localized service areas, such as Fire Service Areas or Road Service Areas. This can also include Special Service Areas such as the water service area in Talkeetna. Animal control is a non-areawide service in the Borough, meaning the cities are responsible for animal control funding and operation within their city limits.

After the public hearings, the legislative branch makes final amendments to the budget based on the input received. They then vote to adopt the final budget, which allocates funds to various departments and programs. The adopted budget becomes a roadmap for the local government's spending throughout the fiscal year.

As citizens, we must stay engaged in the budget process. Attend public hearings, voice your opinions, and communicate with your elected officials about your priorities for the community. Don’t just believe things you read online or hear from friends – research for yourself to fully mature your opinion.

You can also make a difference by volunteering for local boards, commissions, or community organizations that advise the local government on various issues. Every Service Area has a Board of Supervisors that puts in requests for those areas during the budget cycle. Your participation might help fix a road that has been neglected for 30 years or fund more firefighters or animal care officers.

Christian M. Hartley is a 40-year Alaskan resident with over 25 years of public safety experience and public service. He runs a freelance business, Big Lake Writer, from home in Big Lake that he shares with his wife of 19 years and their three teenage sons.