Mayor Dan Sullivan on Tuesday unveiled two versions of his proposed 2013 Anchorage city budget -- one that calls for drastic cuts, and a second that would result in smaller reductions.
Plan A eliminates 187 more jobs from the city payroll. The police department would lose 29 filled positions, mostly new recruits, and 19 vacant positions. The Fire Department would close the Rabbit Creek and Tudor/Baxter stations. People Mover buses wouldn't run Sundays, and two routes would cease running at all. Loussac Library would only be open 46 hours per week instead of 64, and branch hours would be reduced to 21 per week.
Under Plan B, all filled police officer and firefighter positions would be kept, and bus service and library service would be the same as this year.
Ninety-two positions would be cut in Plan B, 10 of which are currently filled, said Lucinda Mahoney, the city's chief fiscal officer. The rest are vacant, she said.
The city is $30 million short of revenues that would be needed to continue services at the same level next year as this year, Sullivan said.
But there's an opportunity to use some local tax revenue that in prior years would have gone to the school district, he said. The city could do that without shorting the district because of a change in the way Alaska funds schools, Mahoney said. The administration's Plan A 2013 budget would be $448.6 million, $6 million less than this year, while expenses are rising.
The second version, which the mayor said he recommends, would add $12 million in local tax revenues to city government -- $12 million that the school district can no longer use. The total would be about $460.6 million.
"I think we're at a service level that's pretty comfortable for this community," Sullivan said, explaining his support for Plan B.
USING THE EXTRA MONEY
Schools are paid for through a combination of state, local and federal money. The state set a new limit this year on how much local tax money can go toward schools. The limit for the Anchorage district is about $14 million lower than before. The school district will still get as much money, but more of it will come from the state instead of local taxes, Mahoney said.
It's up to the Anchorage Assembly whether it wants to use $12 million of the money that is newly available to the city to maintain city services, as Sullivan proposes. The Assembly could decide to reduce property taxes, and not use all or part of it.
"The Assembly has one chance to do this," Mahoney said. "If it's not used it will be lost permanently."
It will be lost because the municipal tax cap restricts increases in local taxes from one year to the next. It doesn't matter under the city charter how the city and school district split the available revenues. The tax cap just limits the total increase.
Assembly Budget Committee chairman Bill Starr said Tuesday he's not happy with Plan A. "It's a little bit harsh, almost like a punitive example," he said. "The police and fire cuts, with the recruits, that just doesn't make any sense."
He said he'd rather look at cutting city planners than police.
But he's not ready to weigh in on using the surplus taxing capacity on the school district side. He wants to know more about whether the Legislature's goal in changing the school funding formula was to reduce taxes. And, he said, "I'm going to be really cautious about taxing to the cap."
Assembly chairman Ernie Hall said he doesn't have a problem with using the local tax money that would have gone to the school district.
"... The reality is it's money that's going to be used to help meet community obligations," Hall said.
Jennifer Johnston, Assembly vice chairwoman, said she'd be looking for a proposal that is between Plans A and B.
She said she needs more details on how Plan B affects different departments.
2013 A BAD YEAR
Sullivan said he's been projecting that 2013 would be a tough year since he came into office, "mainly because this is the fifth year of labor contracts," he said. Labor costs are expected to rise by $16 million next year if the city keeps the same number of employees, he said. Five-year labor contracts for several employee groups were approved in late 2008 a few months before Sullivan took office.
But there have been annual cuts since Sullivan took office, which was right after a stock market crash caused city investment revenues to drop. In August of 2009, Sullivan laid off 27 city workers and said another 56 vacancies wouldn't be filled. The 2010 budget eliminated another 200 jobs, 55 of them filled. More jobs were trimmed in 2011 and this year, but most were vacant.
An administration memo says under either plan for 2013, there will be minimal deficits in future years.
The plan that calls for cutting $30 million in programs and jobs is reflected in the budget books the administration produced Tuesday, Sullivan said, because the process starts with the administration delivering a budget by Oct. 2, based on what it knows now.
But the alternative version, with $18 million or so in cuts, is outlined in a second, 22-page document. The administration will talk about both versions at the Assembly's first work session at 10 a.m. Oct. 12 in City Hall, Mahoney said.
Reach Rosemary Shinohara at email@example.com or 257-4340.