Assembly Begins FY27 Budget Review Process at April 1 Finance Committee Meeting

The Juneau Assembly will begin its multi-week review of the City and Borough of Juneau's (CBJ) proposed Fiscal Year (FY) 2027 budget during the Assembly Finance Committee meeting on Wednesday, April 1 at 5:45 p.m. Residents can join the committee meeting in person in Assembly Chambers at City Hall, online at juneau.zoom.us\\j\\93917915176, or by calling 1-253-215-8782 with webinar ID: 939 1791 5176. The ordinances and resolutions pertaining to the FY 2027 proposed budget will be introduced during the Special Assembly meeting at 5:30 p.m. immediately preceding the Assembly Finance Committee. Meeting materials are available at juneauak.portal.civicclerk.com/.

The manager's citywide budget proposal for FY27, which includes the school district, hospital, and all city enterprises, totals $502 million-down $1.8 million from the FY26 Amended Budget. The FY27 Manager's Proposed Budget maintains current service levels while reflecting the financial impacts of voter-approved ballot initiatives, changes in revenue trends, and rising personnel costs due to negotiated wage and benefit increases included in updated collective bargaining agreements with employee unions.

Two voter initiatives approved in October 2025 significantly shaped the FY27 budget. One capped the general government property tax mill rate at 9.0 mills, excluding debt service. The second exempts essential food and residential utilities from sales tax. The sales tax exemptions are estimated to reduce annual tax revenue by approximately $11 million, creating significant pressure on the City's operating and capital budgets. The mill rate cap was originally estimated to reduce property tax revenue by approximately $1 million. Total borough-wide assessed valuations, including all property types, increased 2.1% over the prior year, with median residential assessed values increasing by less than 1%. While small, this increase largely offset the impact of the mill rate cap and resulted in relatively flat property tax revenue compared to the prior year.

The FY27 proposed budget was developed following direction provided by the Assembly during its December 2025 retreat. In response, the proposed General Fund budget includes $4.6M in expenditure reductions through tightening budget assumptions and $2.5M in additional General Fund revenue from user fees, while maintaining current service levels.

Despite these efforts, the proposed FY27 budget relies on the use of fund balance to maintain operations while the Assembly evaluates potential service reductions during the budget review process. As proposed, the FY27 budget includes $7.7 million in recurring use of fund balance and $2.6 million in one-time fund balance use, reducing unrestricted General Fund balance from $20.7 million to $10.4 million.

Sales tax revenues have been trending lower across several categories, most notably general sales tax and tobacco tax, reflecting changing spending patterns and the impacts of new tax exemptions. The proposed budget also assumes approximately 1.7 million cruise passengers, consistent with recent visitor levels with lower anticipated visitor spending compared to the summer of 2024, but consistent with spending in summer 2025.

The FY27 proposed mill levy is 9.92 mills, consisting of the voter-approved 9.0 mill cap for general government operations and 0.92 mills for debt service.
Personnel costs remain a significant budget driver, increasing primarily due to negotiated wage and benefit adjustments across several collective bargaining agreements with CBJ unions. These increases are mitigated by application of higher vacancy rates, which entails reducing personnel budgets to reflect historical and expected savings due to staff turnover and difficult-to-fill positions. Additionally, costs for education funding continue to shift from the State to the City, adding $797K to the City's FY27 expenditures. While CBJ is now responsible for these additional expenditures, this cost shift from the State does not result in additional funding to the school district.

The Assembly will review the proposed budget over several weeks and consider potential service reductions and other changes to reduce reliance on fund balance before adopting the final FY27 budget.

The budget includes the following major components, including transfers between funds:

• $96.7 million for the Juneau School District: A $1.7 million (1.8%) increase over FY26, primarily for commodities and services increases.
• $233.6 million for Enterprise Funds (hospital, airport, water and wastewater utilities, docks, and harbors): A $20.4 million (9.5%) increase, primarily reflecting expanded services at Bartlett Regional Hospital.
• $149.7 million for General Government: A $4.6 million (3.0%) decrease through tightening of budget assumptions in response to voter-approved ballot initiatives.
• $58.7 million for Capital Improvement Projects: A $17 million (22.5%) decrease, due to large one-time appropriations in FY26 for public safety communication infrastructure bonds, Marine Park, airport infrastructure projects, and in response to the voter-approved ballot initiatives.
• $8.8 million for Debt Service: An $810K (8.4%) decrease in required debt service payments from FY26.

Read CBJ's proposed Annual Budget for Fiscal Year 2027. The City Manager's Budget Message is on pages 19-25. Comments on the proposed budget can be emailed to [email protected], or shared in person at the upcoming Assembly Listening Session on April 15, 2026.

For more information, contact Finance Director Angie Flick at 586-5215 or [email protected]. To learn more about CBJ's budget, visit https://www.juneau.org/budget.