Mayor Dan Sullivan released a 2012 spending proposal Friday that calls for a 1.9 percent, or $8.5 million, increase over this year's general government budget. The rise would be from $443.2 million this year to $451.8 million.
Property taxes would go up a modest 1.5 percent, or $3.7 million. That amounts to $14 more for a $200,000 home, not counting any increases that may be decided later to support schools. The property taxes collected would be $1.5 million below the maximum allowed under the city's tax cap.
But car owners would also pay more next year. An increase in vehicle registration tax rates goes into effect Jan. 1 and will generate an additional $3.8 million. The rates vary by type and age of vehicles.
The 2012 proposed budget is still about $11 million short of what it would take to continue at the same level as this year's budget, the mayor said. And the city expects additional expenses next year:
• 29 firefighters were added this year and will cost an extra $1.7 million in local money next year. A federal grant pays 60 percent of their cost.
• A training academy for new police officers is scheduled to begin in late October. The training and salaries of the new officers will add $1.3 million to the 2012 budget. Chief Mark Mew said the number of sworn officers is expected to increase by 28, from 362 today to 390 next year.
Sullivan said even though there's a shortfall, there will be hardly any service cuts to city government overall. Significant savings -- an estimated $7.7 million -- can be found by reducing areas that had been overbudgeted in 2010 and 2011, he said.
In particular, he pointed to the cost of leave cashed out when employees leave the municipality. That category was budgeted for $10 million in 2010, but the city only spent $4.3 million. A new formula applied in the 2012 budget results in a $6.5 million savings, he said. There will likely be a $4 million savings from the same category in 2011, and that money can also be applied to the 2012 budget, he said.
But he projected 20 city positions will be eliminated to reduce costs. The majority are vacant. One job proposed for elimination in the Department of Health and Human Services and another in the Finance Department are filled. It's too early to tell if any actual layoffs will result, Sullivan said, and he declined to name the positions.
The budget year starts Jan. 1. The Anchorage Assembly is scheduled to hold a budget work session Oct. 21, and a public hearing on the budget Oct. 25. The Assembly is to approve the budget by Dec. 6.
Sullivan said city budget analysts expect continued shortfalls of more than $10 million each year between 2013 and 2017. "And I'm not sure we can find silver bullets," he said during a press briefing.
Reach Rosemary Shinohara at email@example.com or 257-4340.
By ROSEMARY SHINOHARA
Anchorage Daily News