Skip to main Content
Anchorage

Anchorage budget proposal relies on taxes, revenues, cuts to make up deficit

  • Author: Devin Kelly
  • Updated: September 28
  • Published September 28

Anchorage city hall (ADN)

The administration of Mayor Ethan Berkowitz proposed a city budget for 2019 that largely avoids cuts to police, firefighters and homeless services but relies on taxes, cuts and new revenue to fill a projected multi-million dollar budget gap.

The budget proposal, released Friday, reflects ever-rising labor and healthcare costs, said city budget director Lance Wilber.

At $522 million, the proposed budget is 1.5 percent larger than the current 2018 budget.

If approved as is, the owner of a $350,000 house would see about a $6 increase in property taxes, Wilber said.

Property taxes may have gone up hundreds of dollars next year if not tax measures that have taken effect the past two years, according to Wilber. The city enacted a 10-cent-per-gallon gas and diesel fuel tax earlier this year, and the Berkowitz administration gained voter approval in April to raise the amount of the city's residential property tax exemption.

Those measures have not reduced the city's overall taxation level. But property taxpayers now bear a smaller share of the city's tax burden, Wilber said.

Here are some examples of where the Berkowitz administration wants to spend money next year:

– Maintaining homelessness outreach services and summer crews to clean up illegal camps in public parks, as well as money for a winter overflow shelter ($500,000)

– Leasing and renovating new Anchorage Police Department headquarters on 4th Avenue in downtown Anchorage ($2.4 million)

– Police and fire academies to keep up with attrition, plus three new employees in APD's evidence, records and dispatch departments ($500,000)

– Changes to how a portion of the city's public bus system is managed ($500,000). The city has been contracting out some neighborhood bus routes, but Wilber said that has not been working well. He said the city plans to hire 17 new staffers to manage the service more directly.

– Clean-ups on abandoned or derelict nuisance properties ($100,000).

To save money, the Anchorage Police Department proposed cutting its overtime budget by $1 million, Wilber said. APD spokesman M.J. Thim said the department leadership believes there are now enough police officers to make up for cuts in overtime.

A fire truck or a fire engine is also slated to be removed from service, at an estimated savings of $2 million.

Jodie Hettrick, the fire chief, said officials haven't decided which one yet. She said the truck or engine will be removed from a station with lower call volumes. Residents in that area may notice slower responses, at between 3 minutes and 5 minutes, she said.

Firefighters won't be laid off, Hettrick said. She said the firefighters assigned to the rig will be shifted elsewhere, and the jobs will go away through attrition.

City labor costs rose about $3.5 million over last year, and the city is also paying $2.2 million more toward employee healthcare, Wilber said. For more than 2,200 employees, that isn't a huge increase, but it's it's part of a longstanding trend in rising costs, Wilber said. He said the city is still waiting to see whether the opening of a new clinic in March for city employees would lead to savings on healthcare costs.

Meanwhile, marijuana taxes and federal reimbursement for ambulance rides for Medicaid patients are expected to bring in millions to city coffers next year, Wilber said. The city is also proposing a variety of fee increases, including for fire inspections.

What's not changing at all? The city's snowplow budget, which was cut in 2016. That winter, it snowed heavily, and Berkowitz was roundly criticized.

"We're not touching snowplowing," Wilber said.

As officials look for ways to make cuts, one big question in the budget proposal is the actual size of the deficit. Earlier this month, Wilber said the gap could be as much as $6 million — a surprise that emerged from complications and confusion related to the city's new business software, SAP. Before that, the administration had been telling city Assembly members to expect a surplus.

In a Friday presentation to the Assembly, Wilber pegged the amount of the city's budget deficit at closer to $3 million. He said the city was not accounting earlier for money recovered from past legal settlements.

The administration is still fine-tuning the exact amount of the deficit, Wilber added.

The Berkowitz administration is also proposing a $54 million bond package for 2019. The bond proposal includes money for new fire equipment, upgrades to senior centers in Anchorage and Chugiak, roof replacements, road projects and a public safety communications network.

The city is also seeking $3.5 million in bond funding to renovate the ground floor of the existing Anchorage Police Department headquarters on Elmore Road. The renovation would increase storage space and crime lab facilities, with officials expecting that police administrators and sworn officers will be moving to new downtown headquarters at 716 West Fourth Avenue.

The 2019 budget now goes to the Assembly, which can make changes before approving it. Two public hearings are scheduled, on Oct. 23 and Nov. 7.

Some Assembly members have expressed concern about voting on the budget without the city finishing its annual financial audit. Alex Slivka, the city's chief financial officer, said the city is aiming to have the audit ready by Nov. 6.

Local news matters.

Support independent, local journalism in Alaska.

Comments