Alaska News

Public hearings underway as Mat-Su growth outpaces pared-down budget

PALMER -- This year's $400 million budget for the Matanuska-Susitna Borough gives little indication of the growth that recently earned Mat-Su the status of Alaska's second largest region by population.

As proposed by borough managers, the budget contains no increase in the property tax mill rate and no new positions, just an extra eight hours a week to bring one animal-care position to full time. The budget includes a reduction in capital budgets of more than $4 million and a proposal to spend $10.7 million on a fire station, fleet maintenance facility and training center through certificates of participation: a municipal form of financing that relies on investors that make money on lease payments instead of putting a bond before voters.

This year's proposed budget is about $4 million lower than the 2016 budget.

The Mat-Su Assembly is holding a series of public hearings on the budget, including one in Wasilla last week, one at Mat-Su College Monday night, and a third at 6 p.m. Thursday at Willow Community Center.

Deliberations are scheduled to begin at 6 p.m. Monday at the borough building in Palmer.

In a letter introducing the budget, borough officials said that given continued population growth, the lack of new staff positions restricts services the borough can provide residents.

The borough has one employee for every 328 residents -- a higher ratio than any other municipality in Alaska, officials say.

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Property taxes make up the bulk of the borough's revenues, though the flat mill rate is offset by rising property assessments.

Along with a lack of big industry to bring in other income, the borough is burdened with a passenger ferry it is selling to the Philippine Red Cross for about $1 million, far less than the originally anticipated sales price. The federal government has asked the borough to return more than $12 million in federal grants spent on the ferry, although it's unclear if officials will be on the hook for that full amount.

The borough port is also costing millions in repairs while bringing in little revenue.

Critics say the borough budget should better reflect public priorities and focus on public health, safety and welfare.

Every department director reported the disparity between infrastructure and growth during presentations last month, borough watchdog Patty Rosnel said in a recent post on a Facebook group about the budget.

Given the uncertainty of the borough's economy, this might be an ideal time "to hunker down and catch up to what we have and pay a few bills before we incur more," Rosnel wrote.

According to the borough, the proposed comprehensive budget for fiscal year 2017 includes $249.3 million for school operations (much of that is pass-through funds, with about $54 million from the borough); $39 million for debt service (including $10.8 million for school construction); $54.7 million for borough operations; $11.5 million for fire service area operations; $12.3 million for road service area operations; $10.6 million for the solid waste, port and ferry enterprise operations, $20.8 million for capital projects; and $1.8 million for other service areas and E-911 operations.

The Assembly has limited property tax increases for the past six budget cycles, according to the budget introduction letter signed by Borough Manager John Moosey and Finance Director Tammy Clayton.

Moosey and Clayton wrote that such limited increases "cannot be sustained in the future" when coupled with lost revenues from a senior citizen/disabled veteran property tax exemption and declining vehicle tax and state revenues.

Zaz Hollander

Zaz Hollander is a veteran journalist based in the Mat-Su and is currently an ADN local news editor and reporter. She covers breaking news, the Mat-Su region, aviation and general assignments. Contact her at zhollander@adn.com.

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