Watt talks about uncertainty with proposed state budget

    Juneau, Alaska (KINY) - City Manager Rorie Watt was the featured speaker at the weekly Alaska Business Roundtable Luncheon.

    Chamber President Mike Satre said since the state budget was proposed Feb. 13 emails and phone calls to the Chamber have greatly increased.  

    “There are two roles for the big issues that affect our state.  We want to inform and educate our members about the issues,” Satre said.

    An Ad-Hoc Committee was created by the Chamber to discuss the budget situation, “We are gathering information and are watching this process.  It is a marathon and not a sprint.”

    He asked members for input on how the state budget will impact their business and that the Chamber will continue to advocate for what is best for Juneau and Alaska. 

    “This debate is not new.  We have the ability to use Permanent Fund revenues as a shock absorber, as we discuss financial issues for the state.”

    Watt said this is a huge time for Alaska.  The proposed budget could take $7.1 million from the school bond debt reimbursement, $10 million from schools, cuts $3 million in local funds for schools, $6.2 million in Medicaid funding, and cuts $155 million from the University of Alaska.
    “These are big numbers and big impacts.”

    He admitted he is not sure what kind of job losses will occur.  He said they have to be analyzed before such budget cuts are approved.

    The Juneau School Board held a retreat and directed staff to ignore the proposed budget because there is no way they can cut 25-percent of the budget.  “They don’t think it’s going to happen.”

    Watt said the worst thing the community can do is contract.

    “I’m not trying to panic you and I don’t want to panic you.  This is a very serious situation and very serious ideas.”

    The Kensington Mine and Greens Creek Mine provide a huge amount of funds for the CBJ.  He said proposed cuts to property taxes from oil on the north slope is the same issue.  The Governor has proposed to take certain taxes from the oil industry that now go to the North Slope Borough and use them for state purposes.

    Watt said he did have some good news for the crowd, the CBJ is in good financial shape.
    “We have been disciplined in saving money so we can be ready in difficult times.”

    The CBJ has $16.26 million dollars in a rainy day fund or reserves.  “We have resources at the local level to smooth out our problems.”

    The city also has a fund balance from the fiscal year 2018 of $17.5 million.  “We don’t spend our budgets when we don’t need to.  That is a positive relationship with public reserves.”

    This year they project to raise $102 million in taxes.    $51.4 million comes from property tax and $50.4 million from sales taxes.
    “The Governor’s budget proposal is very serious, but we do have reserves.  We are prepared for contraction in revenue or state support.  We have the tools to manage this in the best interests of the community.

    Watt said he is not sure what kind of financial impact the Governor’s budget would have on the economy.
    The municipalities that contribute the greatest to the state’s gross domestic product experience the brunt of cuts and cost-shifting.  
    “It is the Governor’s targeting of school debt reimbursement worries me.  The message is don’t invest in your community.”

    There is a lot of uncertainty that’s been created and that has a negative effect on the economy, Watt added.

    He urged the Governor and legislature to work through their differences as quickly as possible.
    The state will give out $1.9 billion in permanent fund checks in October.  The budget deficit this year is $1.6 billion.
    “We have come to love that PFD, it is part of what makes us different,” Watt added.

    Watt said he doubts the community would support an increase in sales taxes.  

    Watt said Governor Mike Dunleavy put out a vision that is different from the one we have today.  He said individual Alaskans must engage and decide what the state is going to look like.  The proposed state budget would shift $520 million of costs onto local governments.  The budget cuts 25-percent from public education, 38-percent from Medicaid, 18-percent from social services and increases PFD’s by 90-percent.

    “You can’t have it all.  We must decide how we pay for the services we want.  We do not have a budget crisis we have a priority crisis.”

    In other actions…

    Thunder Mountain Boys basketball is holding a fundraiser of sports memorabilia at the downtown McGivney’s Restaurant on Saturday from 4-9 pm.

    Dennis Wheeler, one of the champions for Juneau and the development of the Kensington Mine, passed away on Tuesday.

    The Motown for Our Town concert is scheduled for tomorrow night at the Juneau Arts and Culture Center.  Rev. Bobby Lewis, Eustace Johnson, Jaunelle Celaire, and special guest Ryan Shaw are scheduled to perform.  80 voices will be a part of the choir.   Shaw has been nominated for Grammy Awards three times.


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