Tight budget season begins

PALMER — Between decisions about to be made in Juneau and Washington D.C., and decisions already made at the Mat-Su Borough Assembly table, officials are predicting a budget season filled with either higher taxes, or fewer services.

“You can replace the revenue or we can stop doing things,” Mat-Su Borough Manager John Moosey said.

He cited numerous sources of reduced revenue, including reduction to the state revenue sharing program, which has traditionally shared about $3 million with the borough.

“It’s their intention that we’ll lose some this year, we’ll lose some more next year, and then it will be gone,” Moosey said. “This is not a one-time loss of revenue, it’s an ongoing loss of revenue.”

He said he’s unhappy about the loss of revenue, but he appreciates that the change will be a gradual reduction.

“It allows us to adjust, and it’s not all at one shot,” Moosey said.

Another hit to the budget could come from reduction to the federal Payment in Lieu of Taxes program, which compensates municipal governments for tax revenue lost because of tax-exempt federal lands within their borders and netted Mat-Su about $3.5 million last year.

Mat-Su traditionally receives the largest slice of this pie in Alaska because so much of Denali National Park is within the borough’s borders.

Though the school district does its own budgeting, the district is the biggest recipient of borough money, by far. So any change there is bound to have an impact on the borough’s budget. Legislators in Juneau have slashed millions from state education funding for next year.

“Of course, that is going to have a pretty significant negative impact,” Moosey said. “It’s a big portion of our budget and, frankly, a very important budget. We can’t win when the school loses. They have to be put in a successful position, too.”

Added to those state and federal decisions are a handful of local changes that also will impact the borough’s 2016 budget. Voters expanded the borough’s tax exemption for seniors and disabled veterans, and borough assembly voted in a permanent vehicle registration program that reduces income from registration fees. Both of these changes mean the borough is collecting fewer tax dollars from residents to off-set potential state and federal changes.

Moosey said that the 2015 budgeting process will be drastically different from past years.

“The last three years it’s go, go, go; run, run, run; build, build, build,” he said.

But this year it’s going to be a much more conservative game plan, especially on the construction front since, for now at least, state matching funds for construction bonds are off the table.

“The financial support behind our actions is not going to be there next year, at least not at this point in time,” Moosey said. “That’s where the hard, tough choices are going to have to be made.”