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Discover the heartbeat of Juneau's cultural and community landscape with 'Capital Chat.' This series explores the vibrant world of the community, arts, and dynamic cultural and social events happening in Alaska's Capital City. Tune in to 'Capital Chat' for your essential guide to the pulse of our community, where every story is an adventure and every voice matters.
And now Capital Chat on KINY, where we connect you with Juneau and Southeast Alaska's community organizations only on KINY.
Speaker 2:KINY, Cliff Dumb is here. Good morning. Joining me is Angela Rodell, a former CEO of the Alaska Permanent Fund Corporation and commissioner of the Alaska Department of Revenue, currently a business consultant, member of the Juneau International Airport's, board of directors. Angela, good morning.
Speaker 3:Good morning, Cliff. It's great to be here.
Speaker 2:Yeah. Great to have you in our new studios.
Speaker 3:I know. It's beautiful.
Speaker 2:Thank you. We're we're, pretty proud of it. Now you were part of the Affordable Juno Coalition that filed the three ballot petitions with the city. And now the city is faced with having to, mitigate a shortfall of between 10 and $12,000,000. So now that we're at the other side of this, what metric do you suggest we use to judge whether this initiative has actually made it more affordable here in Juneau?
Speaker 3:Yeah. I I think that's, that's a challenging question for everybody because we adopted the ballot measures a year ago. The city had to make a forecast of what they thought those ballot measures would cost that was included in the information voters had. And now we are working on the consequences of that vote. And I think it's really interesting in how the assembly, how the city manager has approached it, how they use it.
Speaker 3:We didn't have to make any changes to the FY 2026 budget, which ends on June 30, because the city decided and the assembly concurred that there was enough in terms of reserve funds or whatever, there was enough flexibility that they didn't have to immediately make cuts. Remember, they had put out notices to grantees that they might have to cut off second half the grants. Right? And then we move forward to building the FY 2027 budget, which is what we're in right now. And I keep hearing that there's just not a lot of good information.
Speaker 3:We're using the same gap in sales tax, the 10 to 12,000,000 that the exemptions were to cost. We're using that same number more than six months later, seven months later. I mean, that that number was given to us in September, October September because the vote was in October, not November. And so I'm not quite sure how we can expect assembly members to make decisions, big financial decisions on really old information. I have a hard time believing that they don't have a sense of what their sales tax collections are and what they will be, and why they're not talking more about that.
Speaker 3:Why why that number hasn't changed. I find that a bit confusing.
Speaker 2:Well, isn't there a sales tax reduction because of the the ballot measure?
Speaker 3:Well, there is. Yeah. But that's my point is that took effect. When did that take? Thirty days after the voters approved it.
Speaker 3:So it took effect, you know, mid November, I wanna say last year. And prior to that, we estimated 10 to $12,000,000 shortfall. We're still estimating 10 to $12,000,000 shortfall for the coming year. So I guess that in some ways that answers my question. Sort of thinking strategically out loud about why they're still using the same number.
Speaker 3:But we're not seeing yet any reports for the first quarter, January through March. We're not, I guess the 2025, so October 1 through December 31 would have only had a partial portion of that. But I guess the question for me is, is there anything in the collections trend lines? Those are the lower collection periods that suggest that this 10 to $12,000,000 is closer to 10, closer to 12, and how the city should think about it. So there's there's that.
Speaker 3:I I just I think that there's information out there that the city should have a better a better sense. And I do think that there's more play. I mean, I give a lot of credit. I wanna give a huge shout out to the city manager for finding $5,000,000 in budget assumptions.
Speaker 2:Mhmm.
Speaker 3:Right? I mean, that's half the 10,000,000 right there.
Speaker 2:Okay. So I I think there's a lot of confusion. If the anticipation or the prediction when you guys were going through this was that there's gonna be a 10 to 12, whether it's 10 or 12, it's still cuts are gonna have to happen somewhere. So the 5,000,000 from the city manager, great. There's another 5,000,000 that has to come from somewhere if that if that math is correct.
Speaker 2:Am I am I Yeah. Tracking correctly? So that still means cuts from where? Where where do those cuts in your estimation or when the Affordable Coalition was putting this together to identify, okay, we can survive 10,000,000. We're gonna have to cut ABC.
Speaker 2:What what is ABC in in your mind?
Speaker 3:Yeah. I think we approach it differently because we didn't approach it as we have to find $5,000,000 in cuts. I think the way I approached it, and I'm only going to speak for myself when I participated in this as opposed to the other members, but really how we thought about this is we sensed and we knew in some cases that there was over collection happening, right? So the tendency is, and you will hear certain assembly members speak this way about how we have to have more than enough. We have to make sure that our reserves are constantly full, that we have this pot of money.
Speaker 3:I thought Max Mertz had an excellent piece in the Juno Independent recently walking through now that the financial statements are out about the health of those reserves and just how big those reserve pots are. And so here is how I I would recommend the city if I were queen for a day, if I got to decide is that you you go through this process. We know with these exemptions, they're talking about foregone revenue. Right? So thinking about what exemptions need to be relooked at, whether it's retail storefront by nonprofits or it's raising the, you know, the cap on sales tax or what however they manage that.
Speaker 3:But it's a recognition of a reset. You need to let you need to use the reserves to help you resettle the new normal, which is these exemptions. And you need to determine and have that data. Unfortunately, people are really impatient and don't really wanna see that come forward. And then it means talking honestly whether it is about finding these cuts, figuring out if it makes sense for the city to continue to have two pools.
Speaker 3:If it makes sense to consider how we think about the city library, having three libraries, a city museum, where those are. And we've seen good ideas already start to come forward. Parks and Rec has put forward, like, let's get rid of the Mount Jumbo gym and consolidate our operations. We know this will save money. I think just having the conversation, I think having the engagement by the public has been huge.
Speaker 3:I know it's noisy. I know it's messy. It's uncomfortable. People don't like to get criticized. They don't like to get yelled at.
Speaker 3:That is just human nature. But I think the engagement has been really good. One of the things, and I talk about this a little bit earlier today in a column I wrote, but the need for more debt. The city can take on more debt. This is outside the cap that's in the property tax.
Speaker 3:By matching the right tools with the right projects, the city will have the operating budget, operating revenues to collect and dedicate like it needs to. So in this case, we know the city has said this publicly. We know that the local improvement district is not the right tool for addressing the flood mitigation needs out here in this valley. This valley is tremendously I'm sitting here with you today, how far are we from the river? It's right there, we could walk to it.
Speaker 3:We know the airport is in the path, the wastewater treatment facility that services more than 20,000 people in this valley and two thirds of of businesses, in Juneau. And it's not fair for all of it to be put on the burden of people who happen to have their homes out here. And we need to think about this differently. The flood is a problem that's going to affect it can't be just another line item that competes with the Diamond Field House, for example, for money. And so if we prioritize taking care of the flood, we put it in a bond.
Speaker 3:We start talking about debt as a real tool to solve some of our long term capital projects. I'm not talking about a civic center or a city hall. I'm talking about recognizing the real needs. And the voters have a history of voting for important infrastructure needs. They voted for the police radios.
Speaker 3:They voted for the wastewater downtown. They've taken care of stuff in the past. And so I think matching up those tools, I'd like to see the conversation also happen about taking care of the flood and having and starting to socialize a bond, on that front. And because we've capped the operating property tax at the nine mills and the debt service comes over it, it makes it much more manageable for homeowners and renters.
Speaker 2:Let's talk about the PFD. You're the former CEO of the Alaska Permanent Fund Corporation. Where it is and where you see it headed?
Speaker 3:Oh gosh. I feel like, Cliff, we could talk for hours on this because the PFD became a social compact between Alaskans and state government in a lot of ways, right? When I first came up here in 1996 and started working on state fiscal issues, it was it is and has been for a long time the third rail of Alaska politics. You do not touch it. Right?
Speaker 3:And that went out the window ten years ago, roughly in 2017. And so I think we have to recognize how important the PFD is to Alaskans. And it has this place in Alaskan lives that's very different depending on where you sit. So if you sit in Anchorage, Juneau, or Fairbanks, I think your need or your use of the dividend looks very different than maybe if you're out in Galena or Ukijavik or Dutch Harbor, right?
Speaker 2:Right.
Speaker 3:And so we never took the time when the PFD changed and no longer became subject just to the formula and the automatic appropriation, we didn't take the time to build a new compact with Alaskans to say, you know, government has always taken 50% of the earnings and we save that 50% of earnings. And we've been putting that aside for years and years and years, and now we want to use our 50%, But we also need to touch then your 50% in how we wanna think about this because it's too big of a it's too big of a an appropriation for what the state has in terms of liquidity.
Speaker 2:Should the, the state protect the permanent fund through some kind of constitutional
Speaker 3:Yeah. Mechanism? So I think what's really important on this one is that the permanent fund needs to be protected into one fund. And it has been protected by having 25% of royalty go, that's in the constitution. Now we need to protect it by also layering on how much can come out.
Speaker 3:Because quite honestly, we don't have a constitutional protection. It is hard to navigate, you know, if you think about what's in the earnings reserve and how much goes in and how that reserve gets replenished, It's hard to imagine it getting completely appropriated, but it could. And just like we never imagined that we would treat the dividend as the final negotiating piece in a budget debate, we don't imagine taking all this money out of the earnings reserve account, but we could. And so we need to protect that.
Speaker 2:Now the Affordable Juno Coalition has received some pushback recently, and that is some of the commentary I've read, so I wanna bring it up and ask how you feel about it. That is being led by people that are not personally suffering like some of the younger, families are. How how do you address that kind of criticism?
Speaker 3:You know, I think what's really important is what I know the Affordable Juno Coalition and why I was doing it. I heard from people time and time again trying to think about affordability, and they would say I would hear from people who would say, you know, or from realtors or, you know, are my neighbors. My son, daughter, granddaughter would like to buy a home, but she just can't, he just can't afford it. Or they actually found a home, they like it, but they didn't realize all the costs that come with it. Like the utilities, like the maintenance and they're having a hard time.
Speaker 3:And, you know, I was fortunate that when I moved to Juneau fifteen years ago, I was able to buy a home. Okay, my home today is assessed by the city almost three times what I paid for it fifteen years ago. Could I afford to buy my home today? No, I couldn't afford to buy my home today at today's prices and today's interest rates. So I think where we came out is we have these senior exemptions, right?
Speaker 3:The property tax one is at the state level. We can't really do anything about it. We can't eliminate it. We can't increase it. We can't really touch that one.
Speaker 3:Seniors are also granted the sales tax exemption on food, right? Seniors get a lot of assistance. I find it shocking that I found it shocking that we couldn't figure out how to provide the same level of assistance to young families. And that's what was behind this. And you can say that, you know, I think it was JEDC who gave us the thousand dollar number as to how much that would help a family, which was equivalent at the time to another dividend check, right?
Speaker 3:I get that some people might go, it doesn't move the needle. But I also remember hearing from people in November and December when that first came off, it was noticeable and people valued it. And this winter was hard on utilities. People's electric bills were high, people's diesel fuel, heating fuel bills were high. Look at where we are on gas right now.
Speaker 3:Like, this has mattered to people. And so it's really interesting, Cliff, that when we look at all those criticisms, no one, not one group out there is suggesting we roll back those exemptions, are they? The exemptions that created the 10 to 12,000,000. No one.
Speaker 2:Running the PFD, Juno coalition, the run for mayor, has any of this experience changed your view of politics, or has it, evolved your view of politics in some way?
Speaker 3:Yeah. It so my run for mayor was a fabulous experience, I have to tell you. Like it was hard. It was scary to me. I remember thinking like, oh, if I do this, I have to get 25 people to sign, you know, sign the paperwork, sort of nominating me to run for mayor.
Speaker 3:And I remember thinking, oh, that makes me so uncomfortable. The idea of and I'm like, wait a minute, I have to ask people to vote for me. If I can't ask 25 people to sign a petition to get me on the ballot, I have no business running. And so I guess I highlight that story because it really took me out of my comfort zone. Knocking on doors knocked on over 3,000 doors.
Speaker 3:And here's what I find about people in Juno and about politics in general. Politics is really nasty if all I'm going to do is be on Twitter, Blue Sky, Facebook, you know, sometimes Juno Community Collective, you know, and how they have to manage and the commenting. I mean, God help us all because the naysayers, why would why would you run and do and do this?
Speaker 2:Well, exactly. There was a time where public service felt like something honorable. And today, it feels politics feels more like a cage fight with better lighting. Politicians set the tone when they trade insults, exaggeration, lies, misinformation. They get permission for the rest of the country to do the same, and the damage is real.
Speaker 2:Why would any decent thoughtful person wanna enter public life if the reward is personal destruction? Why run for office if your family becomes a target, your motives are twisted, and every mistake becomes ammunition. I mean, I I don't know how you deal with it.
Speaker 3:Yeah. And that's why I I hope that we can get back to having leaders that we, admire, that we can hold up as examples of true public servants. I will say this, when I ran for mayor and knocked on those doors, out of 3,000 doors, I had literally maybe two that were negative, nasty sort of interactions. And that tells me that face to face, people are a lot more thoughtful.
Speaker 2:It's easy to hide behind a keyboard.
Speaker 3:It is easy to hide behind a keyboard. And I will also say, I think this is where we're getting to, Cliff, is that we're starting to recognize that rhetoric doesn't move the needle and that what we really need is is outcomes. And those folks that are interested in outcomes and actually generating results should be supported and elected to office because, boy, is there an awful lot of rhetoric with some really not so good outcome.
Speaker 2:Yeah. So you you've written and I you you do a regular article in the Independent.
Speaker 3:I do once a month.
Speaker 2:Once a month. Yeah. And I think they're doing a terrific job over there. You have stated the need for more people to run for office. Mhmm.
Speaker 2:What kind of people do we need running for office today?
Speaker 3:We need people who are gonna think, who are going to care, and who are engaged. People may be scared away. They may think they don't have the time or the energy. I wanna see a lot more people who are who understand, you know, who who understand what it is to have a business in this town, who understand what it is to try and raise a family in this town, who really understand where the pain points are, recognize that government can't be the solution to everything. I want people who are really thinking about the future of Juno and where they want it to go.
Speaker 3:You know, we talk a lot. It's too easy sometimes to talk about this year's budget without talking about how does this get us to a better community, a better place, jobs for me, for middle you know, to be able to keep growing, to stay in Juneau, and how we think about that. That's who needs to run. And it's like I said, it's scary, but it's necessary because we all deserve to have choices, and we deserve to to have records defended and articulated and visions articulated.
Speaker 2:Angela, thank you for coming in and sharing your thoughts with us today. Appreciate it.
Speaker 3:Thanks for having me. Like I said, we could go in all kinds of different directions.
Speaker 2:I know. Angela Rodell, former CEO of the Alaska Permanent Fund Corporation and the commissioner of the Alaska Department of Revenue.
Speaker 1:You've been listening Capital Chat on KINY, your connection to the people and organizations making a difference in Juneau in Southeast Alaska. Subscribe to the Capital Chat podcast everywhere you listen to your favorite podcasts and at kinyradio.com. Hi.