Manager gives overview on 2009 budget

MAT-SU—Borough Manager John Duffy gave an overview of the proposed fiscal year 2009 Borough budget last night. Overall, the request for local government is down by $2.6 million over last year. However, due to less of an overall increase in assessed values, the proposed mill rate slightly went up.

For now, the proposed mill rate is up 0.682 in the areawide fund over last year and up .02 for the non-areawide. But those proposed increases are a starting point for the Assembly when it begins deliberation. Not included in the proposed budget is about $5 million in state funding, which the Assembly can use for tax relief or services or whatever they agree on. Among the new requests in the proposed budget: a $1.1 million increase to education over last year for a total $44.7 million local contribution; a new $1.5 million fire bay for the Greater Palmer Fire Service Area, and search and rescue equipment.

Three years ago a revenue cap formula was adopted. It puts a ceiling on the tax levy. This year, however, rising costs for goods and services are sorely misrepresented in the formula. Construction costs are projected to rise 10 percent, fuel costs 6.4 percent, energy 9.9 percent, and health care hikes, 11 percent. By contrast, the revenue cap formula uses a mere 1.5 percent as a change in costs, based on the Anchorage Consumer Price Index.

Duffy said in the next fiscal year's budget the tax cap will cause deficits in the non-areawide fund, which includes libraries, animal care, and economic development. “They got an .02 increase to share this year. It doesn't buy a lot. However, next year it will be much lower,” Duffy said, citing the same constraint for road and fire service areas.

Other challenges in the budget process include the state mandated exemptions for senior citizens and disabled military veterans, which amounts to $6.7 million. Local property owners pay for this unfunded state mandate.

Few people, just eight, testified at the first public hearing Thursday night on the budget.
Assembly Member Mary Kvalheim joined her peers in assuring the public. “We are hearing you. We know how hard it is, what the cost of living has done, so we're going to pay attention. We promise.”

Assembly Member Michelle Church invites citizens to email questions on the budget, which is available online at www.matsugov.us

Assembly Member Michelle Church invites citizens to email questions on the budget, which is available online at www.matsugov.us

Assembly Member Cindy Bettine invited residents to return to hear deliberations. The next public hearing is April 29 at 6 p.m. at the Central MAT-SU Public Safety Building in Wasilla.

“The pers and revenue sharing from the state actually is greater than the increase of the proposed budget,” Bettine said. “So if we took that down, the mill rate is actually lower.”

The budget is expected to be adopted on May 1, but a May 8th meeting is scheduled as a backup. The Assembly must adopt a budget by May 30.

For more information call Public Affairs Director Patty Sullivan at 745-9577.

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