It’s budget season and the assembly needs to hear from you.
Our local government is spending about $500,000 more per year than it brings in. That works only because the Haines Borough has savings, but living off savings is neither wise nor sustainable. And our $500,000 shortfall is likely to get bigger, rather than smaller, as the State of Alaska draws back municipal support to cover its own $3 billion deficit.
Short a hat trick by President Trump or a world crisis that skyrockets the price of Alaska oil, our town may look very different in a few years in terms of how we pay for and how we deliver local government services.
That’s not necessarily a bad thing. Bad news often brings a silver lining. Crises tend to make us creative, force us to break bad habits, and try new approaches. But change also is painful, so we’re in for some pain, and for some adjusting.
In relative terms, the good news is that $500,000 is less than 5 percent than our total budget, $12 million. We could eliminate it by increasing sales tax 1 percent ($550,000). But I wouldn’t support that. At this time I’m opposed to any increases in sales tax or local property tax.
I think the deficit can be eliminated in smaller bites, beginning with cutting expenses. As payroll is our biggest expense, we need to look at every job at the borough payroll and see if it’s necessary or could be done differently.
I’ve said previously that I think we can operate without a public facilities director, a position created in 2007 at a time that the borough was flooded with projects and funding from then-state Rep. Bill Thomas. Historically, facilities were the responsibility of the manager. Further, the borough in the past 15 years has added two, full-time facilities maintenance jobs. I support those positions, as they are holding together our aging infrastructure.
(In addition, the Haines Borough School District recently eliminated an administration position in response to its own budget shortfalls.)
There are other places we should look for incremental cuts, including the borough’s employee leave policy, which now allows workers to “cash in” up to three months in paid leave when they end their employment with the borough. Leave is for sickness and personal restoration. As a form of pay, it only encourages sick and burnt-out employees to come to work feeling lousy. I support a “use it or lose it” approach to government worker leave.
(The borough’s leave policy already is generous. Full-time borough employees get four weeks paid leave in their first year with the borough, as well as 11 paid holidays.)
Travel by borough employees, elected officials and others – currently $100,000 – also should get a close look. When more than one employee travels on the taxpayers’ dime, they should share a room as frequently as is reasonable. Written reports by traveling workers and elected officials on what they’ve learned at conferences and training sessions should be required.
The borough also needs to place limits, in code possibly, on items such as per diem for meals and rooms when contractors come to town. Recently, the borough paid $90 per day, per person, to landscape architects for their meals in Haines. That’s $20 per day more than even the State of Alaska pays. That kind of spending needs to stop.
On the revenue side, I support some new user fees and specialty taxes, including a local tax on tours to help pay for a portion of the borough’s $400,000 tourism promotion program. Since 1987, residents have paid for this program by paying a 1 percent tax on local sales. Over time, the municipality has helped build this industry. Now that the industry has succeeded, it’s not unreasonable to ask it to start paying a portion of its costs.
(This is already happening on the state level, where tourism promotion has been cut from $15 million to around $1 million and where business are proposing a tax on themselves to pay for promotional efforts.)
I also support an ambulance fee. Ambulance service is offered free in the borough and paid for by a sales tax. In the extreme example, I think it’s a bit unfair for a little old lady from Deishu to have to pay taxes on her food so that the ambulance can give free service to wealthy skiers from California jumping out of helicopters. Other Haines-sized towns in Southeast charge for ambulance service, which is billed to insurance. Because we’re short of money, unlimited free rides should end, though I’m open to perhaps providing residents one ambulance call per year at no cost.
I support a local tax on alcohol, tobacco and marijuana, in part to help cover the social cost of use of these substances. I think this “tax” would serve as a user fee, placing the cost of drug use closer to individual users. I drink and smoke pot on occasion and I’d have no problem paying a bit more to indulge in these pleasures.
Establishing a local tax on gasoline also could be a form of a “user fee,” placing the cost of local road maintenance more directly on motorists, who are putting the wear on the roads. Currently, it’s people that little old lady from Deishu who are bearing the brunt of the costs of roads, through a sales tax on her groceries. A townsite sales tax currently pays for road maintenance.
Another approach the borough should take is asking seniors to contribute to local property tax in amounts more than their current, state-mandated property tax exemption. Currently, the Haines Borough, per capita, appears to be forgiving more in property tax income than any other town in Alaska. And some seniors would be willing to help out. A note at tax time informing seniors of the cash value of their exemption, including a request for a contribution, could help the town and help make the local tax burden a bit more equitable.
There are other steps the borough should take, including lobbying the state to impose a statewide income tax. Haines sees many seasonal workers who take their Alaska wages south to spend during the winter months. A state income tax would claw back some of that money, allowing the State of Alaska to afford to plow roads, keep schools open and operate ferries in Haines. Petersburg and other communities already have taken this step by writing resolutions to the Alaska Legislature advocating this tax.
There are many more conversations about borough spending and taxing that have to happen to reshape our local government into an affordable machine that works well for us, into the future. If you have ideas, or reaction to my ideas, please call at 766-3775 or tommorphet@hotmail.com. We all need to talk to sort this out.