FAIRBANKS — Borough Mayor Bryce Ward is meeting with state leaders this week in Juneau where he plans to share information on impacts of Gov. Mike Dunleavy’s dramatic state budget proposal.
When the mayor returns, he wants to spark a community dialogue around government services and “what is important to us,” he said in a telephone interview Monday. Details on how that will unfold are pending, he said.
Ward was reached hours before he planned to leave for the state capital and said he didn’t yet have a confirmed appointment with Dunleavy.
“We do hope to have a meeting with the governor,” he said.
Ward said Chief of Staff Jim Williams, Special Assistant Jeff Stepp and Assemblyman Marna Sanford are accompanying him on the trip.
Meetings are scheduled with the Interior legislative delegation and leaders in the state House and Senate, Ward said. He will also be attending a meeting of the Alaska Conference of Mayors.
Dunleavy is proposing about $1 billion of cuts to state government, including public education, as he tries to bring state spending in line with dwindling state revenues. He also wants to redirect property tax revenue on the trans-Alaska oil pipeline from borough to state coffers and repeal a program by which the state pays for a majority of bond debt for local schools.
The total impact on revenues that flow to the Fairbanks North Star Borough and the school district is about $50 million for the budget year that starts July 1, according to a spreadsheet prepared by the mayor’s office last week.
Ward said the bill aimed at diverting property taxes on the pipeline “would be pretty detrimental to our local community.”
In 2016, a legal settlement set the pipeline’s tax value at $8 billion through 2020, ending 10 years of litigation. The pipeline would be worth a quarter of that if the borough hadn’t challenged the value in court, Ward said.
Local leaders have the option of raising property taxes to make up for state shortfalls, but the borough’s voter-imposed tax cap sets a limit, adjusting for inflation and other factors, such as voter-approved bonds.
If the Legislature approves the pipeline tax legislation, that would result in a loss of $11.4 million to the borough, according to the borough spreadsheet.
The remaining property owners would pay for that shortfall if the assembly approved a tax hike. That equals about 1.5 mills, or $150 per $100,000 value on a property, according to Ward.
The assembly can also raise taxes to make up for the $9 million school debt shortfall. That would be outside of the tax cap because it deals with voter-approved bond debt. Ward estimated that would be an additional 1.2 mills, which is $120 per $100,000 value on a property.
What’s not clear is what happens if public education funding is cut.
Under the tax cap, the assembly would be forced to reduce borough services in order to provide more money to the school district. The borough’s budget, spent on things such as parks, pools, libraries, buses and the landfill, is about $115 million.
Contact staff writer Amanda Bohman at 459-7587. Follow her on Twitter: @FDNMborough.