Draft budget proposes 24% property tax rate decrease

The first draft of the borough budget for next year includes a 24% reduction in the property tax rate, authorizes nearly $7 million in general fund spending and reflects recent rate increases for water, sewage, power, trash pickup and harbor fees.

Borough officials and assembly members met for a work session June 6 to discuss the draft budget. Assembly members made suggestions to Borough Manager Jeff Good about the community’s goals and explored opportunities for cost savings. Good plans to investigate the feasibility of these suggestions, which may be reflected in subsequent budget drafts.

The budget is intended to establish the municipal government’s priorities for the coming year, which include addressing infrastructure needs and advancing the borough’s goal of financial sustainability.

A public hearing was held June 13 and the budget is scheduled for approval at the June 27 assembly meeting. The borough fiscal year starts July 1, as do the utility rate increases which were approved by the assembly in March.

After the borough conducted an unprecedented, community-wide property reassessment this year, the community’s total taxable value increased more than 50%. Assembly members at the time reassured residents that they would reduce the mill rate to avoid unnecessarily high tax bills.

“Some people are going to pay a little bit more, but we are going to lower the mill rate to fund what we have funded in the past,” Assembly Member David Powell said in a previous interview.

In the draft budget, the tax rate has dropped from 12.75 mills to 9.75 mills, which is $975 per $100,000 in assessed property valuation. This 24% tax decrease will partially offset the heightened value of property in the borough. On average, many owners can still expect to pay more in taxes this year, but they won’t experience as steep of a tax hike as they would have if the rate had stayed the same.

The borough’s property tax revenue would be slightly higher under the draft budget than in past years. The borough anticipates just over $2 million in property tax revenue for fiscal year 2024, compared with around $1.8 million in each of the previous three fiscal years.

As they reviewed the budget with borough officials, assembly members looked for opportunities to cut costs. At the assembly’s suggestion, Good will review three borough-funded positions and determine what the consequences of cutting or consolidating those salaries might be. The state Office of Children’s Services case worker assigned to Wrangell (50% funded by the borough), the administrative position at public works and the administrative position at the power plant will be subject to review.

“Assembly member Powell had brought up looking at the admin position at public works and the admin position at light and power” to determine how necessary they are to the borough’s functions, Good said. “We definitely utilize those positions,” he said, so the manager plans to “see what the impacts would be if they didn’t get funded and how we would make up the difference in that work.”

Depending on Good’s findings, staffing changes may or may not be reflected in future budget drafts.

The assembly also directed Good to explore options for road improvements on Case Avenue, to raise more revenue from Meyers Chuck moorage fees (the tiny community 50 miles south of Wrangell is part of the borough) and add language supporting boards, commissions and volunteer groups.

At the June 27 meeting, the assembly will be able to adjust the draft budget as it sees fit before finalizing it. “If there’s something in there that you don’t like, you can make an amendment to that budget on that day,” Borough Clerk Kim Lane told the assembly.

 

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