The proposed 2014 budget for the Municipality of Anchorage is out and it’s $4.5 million less than last year’s.
Anchorage Mayor Dan Sullivan summarizes his proposed 2014 budget this way.
“The proposed budget that we’re putting forth is less than the previous year which doesn’t happen in government very often,” he said. “It’s about $4.6 million less than the 2013 budget.”
The proposed 2014 budget is $470,799,885 – which is $4,550,402 lower than the 2013 budget.
Sullivan says this will mean a drop in property taxes. He says there are several reasons the administration can make these reductions.
“Some of the efficiency measures that we’ve put into place are yielding results, we’ve got some areas where revenues are up a little bit,” he said. “And last year we also had some one-time expenditures which we won’t be incurring in 2013.”
Sullivan asked departments to identify savings and efficiencies of about 1 percent of their budget as way to cut costs. Ongoing union negotiations could also help reduce spending, he says, referring to the controversial labor law, also known as AO37.
“I mean we’re negotiating as if AO37 was in place,” Sullivan said. “We’re anticipating in 2014, the contract that we do sign will be at a reduced level of increase.”
Whether repealing the labor law appears on the ballot awaits a court decision. Sullivan says the city also plans to reduce pension contributions this year as a way to cut costs. Funds for city workers are performing better than expected, he says, so the budget proposes reducing the city’s contribution from $10 million last year to $8.8 million in 2014.
Chief Financial Officer Lucinda Mahoney says the administration plans to save money by passing the cost of programs that they’ve been subsidizing on to the public. Ambulance rides would increase by about $300 under the proposed budget.
“The goal of the Municipality is to align the cost of programs with the users,” Mahoney said. “And so for example, not everybody uses an ambulance, but for those that do use the ambulance we’re just seeking to have them pay a larger share of the overall cost.”
Bus fares would also go up under the proposed budget. Adult fares would go from $1.75 to $2.00. Seniors fares would double from 50 cents to $1.00. Anchor Rides, a ride service for people with seniors and others with disabilities who can’t take regular public buses would see a fee increase of 50 cents too, from $3.00 to 3.50. And all passes would also go up.
Mahoney explains that it’s not just revenue increases and cost reductions that would drive property taxes down
“The reason why and individual home owner would experience a property tax reduction is because the base of property tax payers is expected to go up,” she said. “And this is due to the new construction that we are seeing here in the city of Anchorage in 2013.”
“We expect new construction of about $200 million – commercial construction mostly.”
The owner of a $300,000 home would see a reduction of around $9.
Mayor Sullivan says he expects the budget to pass with a few revisions.