Anchorage Mayor Suzanne LaFrance on Thursday rolled out her administration’s budget proposal for next year. There aren’t any major spending increases or reductions, though officials warned of a looming fiscal cliff.
“For now, we've narrowly avoided cuts in service delivery to Anchorage residents,” LaFrance said during a news conference. “The Office of Management and Budget received tens of millions of dollars in additional budget requests that we simply can't fund.”
LaFrance’s budget proposal is only about $9 million more than this year’s, sitting at around $659 million. She said her first budget as mayor focused on staffing up departments and services. Next year’s budget largely keeps things at the status quo while, she said, prioritizing full funding for public safety commitments like the police and fire departments and maintenance and operations positions.
But LaFrance and her administration said Thursday that the city faces serious financial challenges ahead.
Anchorage Management and Budget Director Ona Brause said the city has about two years to come up with a new revenue source, or it potentially faces large reductions to major services.
She said roughly 60 percent of the city’s revenue comes from property taxes. She said the city has been seeing less money in federal grants and a continued decline in state support for years.
“We actually have lost almost that entire billion dollars of revenue in the last decade,” Brause said. “And that is one of the reasons that our infrastructure feels the way that it feels. We have now gone through 10 years of lost funding, so it means that we can feel the impact of that loss of revenue.”
LaFrance said she’s open to a number of proposals for new taxes, including some proposed by Assembly members.
“There's one around a sales tax that has been introduced,” LaFrance said. “There's one for a short-term rental tax also that's before the body and conversation around looking at the bed taxes too.”
LaFrance said her preferred option would put new tax revenue towards property tax relief, public safety initiatives and investing in various community resources and needs.
Anchorage Assembly Budget and Finance Committee co-chair Anna Brawley said she hadn’t had a chance to fully review the budget by Thursday afternoon, but she agreed that the city doesn’t have a lot of wiggle room to spend more on services.
“That’s about all we can do with the budget as designed and the fiscal structure we have, even as our needs continue to grow,” Brawley said.
The budget is currently about $175,000 under the tax cap -- that’s the most the city can spend without major adjustments to property tax rates.
Assembly members will begin their process of amending and voting on the budget during their meeting next Tuesday night.
