Fairbanks Borough taking comment on budget as budget teeters near cap

The Fairbanks North Star Borough Assembly takes public comment tonight on the proposed budget for the upcoming new fiscal year. Borough spending is up against a cap on property tax revenue, forcing a discerning look at budget priorities.

Listen now

The proposed $161 million borough budget comes close to current year spending. Borough chief of staff Jim Williams said the FY18 budget reflects a trend of rising costs and stagnant revenue.

“They’re just some natural costs that go up, plus some contractual obligations,” Williams said. “And you have flat revenues. It’s gonna intersect at some point and we’re here now.”

Over seventy percent of borough spending is covered by property taxes, and the new budget includes a small tax increase, bringing the borough the closest it’s ever been to a limit set under a long running voter imposed cap.

”The revenue that we’re projecting to collect this year is about $9 under the cap,” Williams said. “We could put $9 somewhere in the budget and make it 100 percent, maybe buy a couple gallons of gas for a vehicle, but we’re at the cap.”

The cap limits the amount of property tax revenue the borough can take in to the what’s collected the previous year with a few exceptions including, revenue from new construction, but Williams says not much of that is happening.

”There’s not a lot of demand to build new properties and property values are staying relatively flat,” Williams said. “As that stuff stays flat or slightly increases, and when you apply the tax cap formula, it’s kinda the perfect storm of stuff.”

With no increase in revenue, Williams said it’s important for borough residents to tell the assembly what their priorities are.

”We need ideas,” Williams said. “I mean, what chess pieces do you want us to move?”

The biggest piece is local school funding. The borough mayor’s proposal is $4 million short of what the school district is seeking. The district is already laying off teachers and considering other cuts in light of a pending state reduction in school support.