The city of Houston is facing such severe financial woes that all but three city employees have been furloughed. Houston mayor Virgie Thompson is working without pay, and volunteers are keeping the wheels of city government turning.
Houston, on the Parks Highway in the Susitna Valley, has hit the financial wall. Houston mayor Virgie Thompson, blames the crisis on unpaid property taxes.
“There’s a little over $35, 000 delinquent, in other words, they haven’t paid it. So that’s $35, 000 right now that we don’t have that we projected to have.”
The city of two thousand residents is just beyond commuting distance to Anchorage, there are few local jobs, and state revenue sharing funds from this fiscal year are running out. Thompson says the city’s greatest source of revenue is property taxes, and that the much ballyhooed Alaska Railroad spur linking Houston and Port MacKenzie is not helping bring in any money.
“Not yet. You know, part of that is owned by the Borough, and you can’t tax the Borough. The other part is owned by the state, and you can’t tax the state. The basic infrastructure is there, but until the private sector comes in and does something with it, it’s not taxable.”
Thompson says she’s putting in the 80 hours a month required by city law, but is not turning in her time card to the finance clerk, so as to keep her 1500 – dollar a month salary in the coffers.
The finance clerk, along with the city’s fire chief and city clerk, are the only Houston city employees now drawing a paycheck.
The city is not legally allowed to borrow money. City sales taxes bring in some revenue during the tourism season, which has barely started, and next year’s state revenue sharing is still on the horizon. There is some money in the Matanuska Susitna Borough budget for Houston: $9500 for the fire department, and a 21 thousand dollar block grant to be used at the city’s discretion.
The Mat-Su Borough budget for next year has been approved, but is awaiting expected vetoes from Borough mayor Larry DeVilbiss, which will be made known this week.
Thompson says the city is due three mils of Matanuska Susitna Borough property taxes. The Borough collects the taxes and sends out the delinquent notices, but it can be up to three years before any foreclosure action is taken on non-payers.
“I mean, we may be worse off than a lot of other cities, but, look at the state. It’s the domino affect, it goes down. Who knows, half of those people who are going to be laid off on the Slope actually live in the city of Houston and they can’t afford to pay their property taxes, so it affects us.”
Two positions, a full time public works director and one part time job are furloughed, one position will not be rehired, and all the firefighters have been furloughed from duty shifts, although they will be paid if called on to fight a fire.
Thompson says it’s normally June before money gets tight. This year, she says, the financial squeeze started in April. Thompson says the city will struggle to provide the services that property owners who did pay taxes deserve.