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First Things First by The First Things First Alaska Foundation (FTFAF) is broadcast monthly on KINY on Saturday at 9 a.m. and on KJNO on Sunday at 9 a.m. Each episode explores the balance Alaskans face: protecting our state's rugged beauty and vast wilderness while advocating for sustainable economic growth through responsible natural resource management.
With thousands of jobs lost in the past decades due to restrictive regulations, First Things First raises vital questions about the future of Alaska’s economy. Can we preserve our cherished landscapes, waterways, and wildlife while fostering prosperity for generations to come?
Join FTFAF as we explore essential areas for Southeast Alaska’s growth—highlighting education, advocacy, and smart development.
Time once again for another First Things First podcast. I am Dano. Remember, this is to be informed, get involved, and make a difference. And in front of me, I always have Don Habiger. He is your executive director of First Things First.
Speaker 1:Denny DeWitt right across from me this month, member of the First Things First board. And I have Tom Williams, just a 48 year resident of Juno. It's how he wanted to be introduced. And it was funny we were talking before the mics turned on. You guys have been in Juno for a long time.
Speaker 1:We're looking at one hundred and twenty years of community observation we're about to get into.
Speaker 2:Absolutely, Deno. We think we have watched the community long enough to be intelligent this evening.
Speaker 1:And we have to remind everybody, get out there and vote. We're gonna be talking about those propositions today and Juno's affordability. October 7 is the date at eight p. M. But there's some postmark stuff too, right guys?
Speaker 2:Absolutely. You have to have your ballot measure if you're mailing it in to the post office and earmarked or stamped on that date.
Speaker 1:So October 7 is the day. That's why be informed, get involved and one of the best ways to make a difference guys, get out Especially there and with what is going on with the CBJ ballot measures, guys. I'm gonna come right out with this. You ever seen since we have a hundred and twenty years of community observation here? Have you ever seen this many heavy hitting ballot measures that directly affect Juno's economy?
Speaker 3:I haven't.
Speaker 4:I haven't either.
Speaker 2:And I can't remember when, so I'll say no.
Speaker 1:Well, let's dive into it then. What are these propositions? Denny, I know you are very passionate about this. So I'm gonna let you take it from here and let's open up this conversation. Do these ballot measures create Juno affordability?
Speaker 1:And that's what it's all about. Denny, take it. What are these ballot measures that we'll be voting on?
Speaker 3:Well, two of them will and one of them won't. Proposition one caps the property tax rate to nine mills. It doesn't limit debt service on bonds voted for by the citizens. Currently, the portion of the property tax that would be capped at 9.16 mills to fund our operating budgets. But the cap portion, there's a current limit, which is 12 mills.
Speaker 3:So this reduces that and there's a lot of confusion about that. In addition to the nine mills, voters can vote on bonds that would be in addition to that amount. Right now, our general government budgets about two twenty one million dollars The city estimates that proposition one might reduce revenues by as much as a million dollars. And assuming no inflation in property values, this would require almost half a percent reduction, almost half a percent reduction in city spending. I think that if we can't find half a percent in the $221,000,000 we're spending, we need an awful lot of new people in our city government.
Speaker 3:Proposition two is a measure to help younger folks in our community. Currently, seniors do not pay sales tax on food and non commercial utilities. Proposition two simply extends that tax relief to all citizens in our community. And utilities include electricity, heating, oil, propane, wood pellets, water and sewer, garbage, and recycling at the person's primary residence. Most folks don't realize, as a matter of fact, that the city actually charges sales tax on the services that it provides to you.
Speaker 3:So in your water and sewer, if you look at the bill, there's a charge plus a 5% sales tax on the city or going to the city in addition to what you're paying for the service. The city estimates this proposition may reduce sales tax by as much as 9 to $11,000,000 Supporters of the proposition suggest that it leaves 9 to $11,000,000 in the pockets of the citizens to increase economic activity in our community. And as you create more activity, you're gonna get more sales tax as well. So have a little difference of opinion on what that money represents, whether it belongs to the government or whether it belongs staying in the pockets of the residents here. And it's clearly a proposition that will help make Juneau more affordable, particularly for our young families, as it provides equity in my judgment across our population.
Speaker 3:Proposition three is kind of an interesting proposition. It was thrown together by the assembly, fearful of not having all the money they could spend. It creates a seasonal sales tax. It would permanently establish a 7.5% sales tax from April 1 through September 30 and a 3% sales tax from October 1 through March 31. It would repeal the current 5% year round sales tax and 1% of which is permanent, 4% of which currently must regularly go out to the voters for authorization.
Speaker 3:So not only does it put in this weird tax system and increase the costs to the citizens, it takes away from the citizens the ability to vote on our sales tax, which has been here historically. The city alleges that the combination of proposition two and three might give a savings to the citizens. Their gyrations ignore the realities of life. The fact that we do not spend at a level amount each month, we tend to spend more heavily in the summer months when the tax is 7.5%. Their numbers do not reflect that their model ignores the fact that seniors do not get a savings that they suggest from proposition two.
Speaker 1:I don't think that part's talked about enough.
Speaker 3:I don't either. But this assembly has not been the friend of senior citizens. Seniors aren't paying the tax now that are being repealed, thus all the savings that they attribute to seniors, seniors don't get. For seniors, proposition three is clearly a tax increase. Small business owners I've talked to oppose the tax because of accounting difficulties, the forced change in buying habits of their customers.
Speaker 3:And for young families, for example, buying school clothes in July and August, when school starts, they're gonna pay 7.5%, which is gonna increase their costs. And it's the young people in this community we need to be concerned about. Folks who enjoy fishing or depend on fishing for an income are gonna find out that their 2.5% increase over the current 5% in the summer on fuel and other supplies is gonna be a real surprise that they're not gonna want. If you're doing gardening or home maintenance, which mostly we do in the summer, it's gotta be more expensive. The notion that this is gonna be a savings for Junoites is interesting calculations.
Speaker 3:The other thing that folks don't think about or haven't thought about, and the problem is proposition three, both in terms of its financial modeling and just the general idea of it, my judgment has not been well thought out. For example, we have a group of people in Juneau that are gonna experience the increase in our seasonal sales tax called the legislature and legislative staff. And this is no way to keep them happy with our community being the capital. It's gonna raise all those issues again of the additional cost, extra cost, penalty cost, if you will, for having the legislature here in Juneau. Another thing, interesting fact in the voter information packet that they sent out, it was done by the city.
Speaker 3:And it tells us that the city for proposition three would receive about an 18% increase in sales tax. But it doesn't tell us anything about how much more we get to pay if proposition three passes. So you may know that I'm not a real fan of proposition three. And I think it's gonna hurt our community more than it'll help.
Speaker 1:It just feels like a piggyback off the first two. I'm sorry, the way it was even presented, way it even just feels like a piggyback off of the actual voter initiative ones that were put out there.
Speaker 4:That's exactly what with this situation was. You know, a couple years ago, then the finance director came to the chamber and made this presentation about how they could eliminate the tax on food for everybody. And to offset that, he assumed that it had to be offset, was this seasonal sales tax. At least at that point, the assembly looked at it, or that assembly did, and said, this doesn't make any sense. So it still doesn't make any sense.
Speaker 4:The only reason that, and in my opinion, the assembly has proposed this, is they're afraid that they're going to have to make better decisions on what they spend money at. If you've got lots of money, you can throw it around and not make the best of decisions. And we can talk about that later. And the other thing is that I was curious to note that the chamber, Chamber of Commerce actually came out in opposition to ballot measure three, for the obvious reason that you talked about, Denny. And the confusion, the additional work that they have to do to change that, which guess what?
Speaker 4:That's gonna raise they're gonna have to pass that on to the customer as well. And I think it's just a very poor way to try to save government getting more money out of our pockets. Because you're right on that one. Is any any savings that we have will be more than offset. Any savings that the people at Juno have by agreeing to ballot measure one and two will be more than offset by the city's decision to push this.
Speaker 3:I couldn't agree more. One of the
Speaker 2:things that we often forget about is one of the basic economic rules of supply and demand. And one of the things that since I'm in manufacturing and sales of those manufactured goods, a recent report said that our consumers, particularly through the holiday season, are going to be very price sensitive. So what does that mean to our tourists and what does that mean if we increase our sales tax? It really means that price sensitive cruise customers, and there are many of them, will begin to look at other ports. How do I know that?
Speaker 2:I was in Skagway on Monday afternoon and I took the fine ferry Columbia down to Juneau. But one of the great conversations I overheard was a couple talking about a sweatshirt or a piece of apparel in a shop and they were price comparing. And the gentleman said to the lady, you should have bought that in Juno. Now, if we flop that around and increase our costs arbitrarily, they're going to start buying in these other shops. And so Juno needs to be really sensitive about these issues as well.
Speaker 1:Well, even as a Juno resident, think I'm gonna start becoming more of a sensitive shopper. I think I have been slowly over time as things have gotten more expensive here. I think that's just kind of the way it is.
Speaker 2:Well, absolutely. And really we're talking about affordability. So if you're going to increase cost on let's say a robust industry like tourism and we're increasing our dock costs, we know that, the industry has talked about that. We're going to increase if you will, if three passes, passenger cost in retail goods, that's gonna be on tours, that's going to be on goods in our tour shop. And just because of cost increase, a conscious tourist or a price conscious tourist is going to go to another community.
Speaker 2:For example, Ward Cove has a, I don't know, it's probably the size of Marie Drake because they bought the old pulp mill down there and it is all retail. Do you suppose that folks will begin to take their dollars down there? It is a real possibility and we have to be conscious of that here in this community.
Speaker 1:Well, I don't like that we have to be so price conscious, but it just feels like the city isn't sometimes. And it's becoming more and more apparent, I think, especially when you have to have ballot measures like this.
Speaker 4:And I think another issue here is that over the past several years, as prices have gone up, the general sales tax revenues have continued to rise for the city. Plus we, a few years back, made it so that any out of state sales, people had to remit sales tax. So I'm not saying the city is awash in sales tax, but they've certainly had a substantial increase in sales tax revenues for the city to spend hopefully on our needs and not make bad decisions or poor decisions on. So I think leaving some money in the people's pockets without trying to get it back with ballot measure three is, think it's a good idea to support two and not support three.
Speaker 1:Well, they're gonna continue to spend. Mean, what's going on with the Burns Building right now, Telephone Hill, things like that.
Speaker 2:Absolutely. I'm gonna take that one on, Dano. Please. The Burns Building, we had a Committee of the Whole meeting, I remember the right format, on August 5. And we started hearing about some of the price tag on the Burns Building.
Speaker 2:9,300,000.0 is the purchase price. There is also a 650,000 annual condo fee. And the whole purpose of the condo fee is really to make sure that the city and borough along with the permanent fund corp that owns the building pays their fair share in maintenance cost. Now going back to maintenance cost, there's a number of things that we just don't take care of. If you go back to the reason for the Burns Building, really is because we did not take care of our own infrastructure, I.
Speaker 2:E. City Hall, 155 Heritage Way now. And that is a real problem for our community, paying for what we own. And we just have to really look at how we're spending our money. The Burns Building is a prime example.
Speaker 2:And let me just tell you this, that in the request for proposals so that they could study whether there were options out there, The CPG said they needed 46,000 square feet to have their 150 whatever employees there. Guess what? The Burns Building cannot supply that. The most they could supply was 44,000. But wait a minute, we have buildings that are no longer used by this school and we ought to be using those buildings.
Speaker 2:Again, going back to that RFI, they said you can have this, the city hall essentially or our employees anywhere. That was part of the proposal or at least the things that you were supposed to respond to. And guess what? We have great buildings. Floyd Dryden out there, 77,000 square feet.
Speaker 2:Why cannot we just move our people to something we own and take care of it at the same time? A novel concept for our assembly.
Speaker 4:The other thing that you need to remember is as soon as the city acquires part of the Burns Building, that takes that part off the tax rolls. It is no longer private property that is taxed. So they're actually reducing their taxes, or the property revenues, property tax revenues. I was curious, a few years back when Rory Watt was promoting the whole idea of a new city hall, which the voters turned down twice because it got up to $43,000,000, now they're only gonna spend, what, 10,000,000 or $9,000,000 plus another close to that to remodel it. So it'd probably come in around $20,000,000 But Rory was saying we needed a new city hall because they were paying what, dollars 700,000 in rents.
Speaker 4:They were collect, we were from private companies. We were renting and we wouldn't have to pay that now. We're trading, under this proposal, we're trading, saving those rents for a condo fee, which doesn't make much sense. I mean, it just doesn't make, especially when you have a building or when you have buildings already that can be repurposed. Even if you were to take the money that was scheduled for remodeling the Burns Building and put it into repurposing some of our existing buildings, at least you're not taking those buildings off the tax rolls.
Speaker 4:And do we really need five star accommodations for our city workers? No, they need safe, efficient office space, and everybody will agree to that.
Speaker 3:With all this, we're still gonna have a problem of lacking parking access.
Speaker 4:Exactly.
Speaker 2:That's right, yeah. There's just not enough space. And so how are they gonna solve that? They'll have to go buy, purchase, rent parking space just like the state did when they expanded. Now they've contracted and it's gonna add cost.
Speaker 2:And one of the things that I taught my kids is the economic concept of transtaufel. And that really is there ain't no such thing as a free lunch. And so when we think about our kids that are choosing to live here, our young families, there is always trickle down. And every time they spend willy nilly the assembly, somebody's gotta pay for that. And that's what we're trying to address here, affordability so that our kids stay, they find their careers, they find longevity here and don't have to move.
Speaker 2:If you just look at the school enrollment numbers, they are moving. We are losing kids and we're contracting as a community and we have to reverse that. Affordability is a real issue.
Speaker 1:Who wants to take Telephone Hill after that?
Speaker 4:Well, Hill seems, there's a lot of controversy around Telephone Hill, but separate from the people having to move out any of the emotional issues involved with that. The practical issue is that the assembly is moving forward without an endgame. There is no end plan. And there's talk about what we would like, but until you have that, it makes no sense to spend $5,000,000 now and 4,000,000 later for a total of nine. It makes no sense to do that until there is an endgame.
Speaker 4:And there is no rational sense why you can't bid that out to a developer. Even if you were to pay them a million or 2 to take it on, it would still save us a lot of money. Plus, it would likely get done. Now I understand that the assembly did try, or the city did try to get some parties interested in it. But if you make so many conditions on it, it's certain to fail.
Speaker 4:They need to take a much more business like approach rather than a city government controlling everything approach. That isn't going to work, and it's a poor economic decision. If they fail to spend $9,000,000 if they save that $9,000,000 that will help fill the gap that, at least for a year, that they're concerned about losing the sales tax revenues.
Speaker 2:One of the justifications for Telephone Hill of course is increased housing. We just need to increase our housing stock. But as I recall, again, were talking about longevity, watching the community. We had a project that was driven by the assembly or the city, Peterson Hill. And the whole justification for them getting involved in that was affordable housing.
Speaker 2:Well guess what? Those lots and those homes started selling at 450,000, 500,000 a few years ago and they just did not hit their mark. Do I think that a government can hit their mark on Telephone Hill based on observation of past, I have my doubts. So it's why groups like First Things First and Citizens, remember ballot measure one and two got the signatures, the community was interested in it and they want to vote on these issues. So it's citizen driven.
Speaker 2:Affordability really matters to this community.
Speaker 4:I think one of the other things that I have a concern about on ballot measure three, it makes our sales tax that they're proposing permanent. And taking that option away from the citizens to say, I like your idea, I don't like your idea, and choose which projects that they want to fund. That's been historically the way we've done that. When we voted, they put together a capital projects list or needs that need to be met. That goes away and it all goes back to the hands of the assembly without any voter input.
Speaker 4:And I think that's given the assembly's recent track record on whether they're making wise spending decisions. I think that's a bad thing to give this assembly or any future assemblies. It's always better to refer things back to the population. And quite frankly, the population is starting to see that, that the assembly isn't making as good a decisions that they should be, which is why we have ballot measures one and two. And we've had some prior ballot measures.
Speaker 4:We're seeing more and more of that. And it should be a reflection on the assembly's decision making. And they need to start listening better.
Speaker 3:I think one of the things that Tom brings up about continuing to have voter approval over time on sales tax, We voted twice against the notion of a new city hall and the city has moved ahead with it anyway. It certainly demonstrates to me an attitude that I don't think is very appropriate, but a fear that I have giving up my vote on future sales tax and what the consequences of that would be. I always think that having the opportunity to vote on taxes is an important thing for the population. Sometimes I'm on the winning end, sometimes I'm on the losing end, But it's important for our borough assembly. This one, it has been historically, but this one particularly needs to be responsible more to a vote of the people in terms of increasing and maintaining taxes.
Speaker 3:And I think
Speaker 4:the other issue, Denny, is especially as it goes back to the Burns Building, the new city hall was turned down twice, although it was more expensive than this. But I think it would have been a lot more appropriate if the assembly, having remembered that the the voters said no, would have put it out there as a bond issue. To say, is this something that we really want to do, need to do? Because it's a significant investment. And it's not just short term, it is long term.
Speaker 4:Once you own something and you're paying condo fees forever, that's a recipe for, oh, we need more taxes to be able to afford the decision that we made many years ago. And you're locking in the assembly to future assemblies. But I think it's the attitude down there that needs to change relative to do we really trust our voters. And I hope we trust our voters this time to say no to locking in this sales tax, this increased sales tax, which will increase everybody's sales tax by and make it permanent. It's just a very ill conceived ballot measure three, I hope everybody votes against it.
Speaker 1:Well, from what I can tell, the city wants everybody to vote yes, yes, yes. But sounds like we have a bunch of yes, yes, nos in here.
Speaker 2:That would be correct, Dan.
Speaker 1:Think so. Well, literally, that was the way it was put out to us in the pamphlets, so.
Speaker 4:Oh, the city wants us to vote yes on limiting their ability to raise the mill rate? I kind of doubt that. I saw some literature that came in from associated with the city of employees that said, don't vote yes on one. And we should vote yes on one. Know, Denny, you talked about the ability to still go out and do bond issues.
Speaker 4:So when we have an emergency, first of all, the city has an emergency fund that for short term emergencies we can deal with. We can always hold a special election if there's a really significant, and we can always vote to fund that. What we're talking about is not significantly reducing, just trying to slow down the city's budget revenues so that it doesn't get out of hand and they have to make better decisions as to how to spend the revenues that they will be getting. And a million dollar loss and a $220,000,000 budget is just not significant.
Speaker 3:You're right, the other thing that we all have been here long enough to remember when the 12 mil rate cap was proposed back in the 80s, I think they have gotten all of their old material from the 1980s out. The world is gonna end. We're not gonna be able to exist tomorrow. All city government is gonna crash. We refer to that because we've seen that approach many times, the Washington Monument And that is that any time there was ever a reduction proposed in Congress, someone would stand up and say, Well, they'll close the Washington Monument.
Speaker 3:And to my knowledge, except for the Obama administration who wanted to play a little game, They've never closed the Washington Monument. And if we go to a 9 mil cap, life will not end in Juneau.
Speaker 4:It's just a zero point $1.06 mil difference in what we're currently spending for basic operations, except for the bond issues, which were voter approved bond issues, and that's fine. Anything that should increase that should be voter improved.
Speaker 3:But it's a strong message to our assembly that they need to be more cautious about what they're spending and what they're spending on.
Speaker 4:And good managers will be able to figure that out. I truly believe that. When you have way too much money, it's easier to be sloppy on how you're spending that money. It's a little tighter, and this is not a huge, huge reduction in city revenues at all. And quite frankly, given the price of everything, the cost of goods and services go up, sales tax revenues will increase.
Speaker 4:As the price of homes continues to rise, it seems to be doing that in Juneau and just never ending, then even with the 9 mil cap, it will still go up. And the other thing is
Speaker 3:My taxes went up $500 this year.
Speaker 4:The other thing is that perhaps the assembly should promote more development. I mean, what took five years to approve the development downtown by Huna Totem. Five years. Perhaps if we could make those decisions a little more timely, perhaps I mean, we've got this potential out here with Gold Belt's development on the West Douglas, which would be a huge boon not only for the economy, but guess what? Those properties will become taxable, and they'll be a huge boon to the city government coffers.
Speaker 2:Tom, you mentioned five years, but I think it's five years and still counting. I don't believe the lease is signed yet. So Juna Totem does not yet have the green light, we are still waiting, which is reprehensible for our community to develop and grow. We need to develop and grow.
Speaker 1:Guys, I want to thank you so much for coming in and talking about this today. I think this just shows how passionate when you have one hundred and twenty years of community observation in the studio can be and shows you how important it is to get out there and vote on these CBJ ballot measures. And hopefully, you got some good information from this podcast today that helps you make a very informed decision because we wanna be informed, get involved, and, of course, make a difference. And that's what the First Things First podcast is all about. I wanna thank Denny DeWitt, member of the First Things First board for coming in here as well as Tom Williams, give sharing us some great knowledge.
Speaker 1:Forty eight year resident here in Juneau. And of course, Don Habiger, your executive director of First Things First. And if you've missed any of these podcasts or wanna re listen to this podcast, you can tune in over at kinyradio.com to listen to the First Things First podcast or any of the podcasts we've done. And Don, I always gotta throw this to you before we leave. If you've heard anything today that you really enjoyed and say, hey, I wanna get involved with First Things First.
Speaker 1:Don, how do they do that?
Speaker 2:Two ways to reach out to us. Of course, the website which is ftf, akthewordfoundation.org. And then of course our email, which is the word first, T F I N C. So First Things First Inc, abbreviatedgmail dot com.
Speaker 1:Be informed, get involved, make a difference. And you do that by voting. Cast your ballot. You have to get it in by Tuesday, October 7. Cast your ballot by 8PM.