The borough assembly has started work on its budget for the fiscal year that will start July 1 and will need to decide on a school district request for more funding in addition to paying higher fuel and property insurance costs and spending on necessary maintenance of public facilities.
Revenues are up, however, with more money coming in from sales taxes and federal payments in lieu of property taxes on national forest lands.
Borough staff and assembly members started their budget review during a work session April 20.
The borough’s annual contribution to the school district operating budget has held at $1.3 million in recent years, but facing a pandemic-induced drop in enrollment and less state funding based on the student count, the district has asked for an increase to $1.592 million for the 2022-2023 school year.
The assembly did not take action at last week’s work session. Further budget discussion and decisions, such as setting the property tax rate for next year, will come in the weeks ahead.
Borough revenues, including 100% of sales tax receipts, property taxes, state and federal payments, are projected at almost $7.5 million for next year. After schools, the borough’s second largest expense is the police department.
That revenue total does not include self-supporting accounts, such as the utilities, port and harbors, which are outside the general fund.
The top source of revenue is projected in the draft budget as sales taxes, at $3.3 million, followed by property taxes, at $1.8 million.
Wrangell’s sales tax rate has not changed in years, but its revenue has consistently increased. Over the past five years, annual sales tax revenues have increased at an average growth rate of 4.4% a year, Mason Villarma, borough finance director, reported to the assembly last week.
Higher prices for goods and services due to inflation and supply-chain constraints, while painful for consumers, generate more sales tax revenues for the borough.
“Post-pandemic tourism is poised to bolster the local economy,” along with additional funds for community projects under the 2021 federal infrastructure act, Villarma reported to the assembly.
And while inflation-driven prices add to the borough’s sales tax revenues, they also add to the borough’s costs. The draft budget includes funding for a 25% increase in fuel costs for next year. The borough is expecting a 10% increase in its property insurance premiums.
Among the other issues and suggestions discussed at the budget work session were:
* The borough could save as much as $30,000 a year by dropping flood insurance, on the assumption that state or federal disaster aid would cover repair costs if a flood caused significant damage to public facilities.
* The assembly may consider adding a surcharge when people pay their tax bills with a credit card. The borough currently pays about $75,000 a year in bank and credit card processing fees.
* The borough is considering several improvements and work projects at public facilities around town, including conducting a full assessment to excavate, remove and clean up around buried fuel tanks at the Public Safety Building and high school. Both tanks were installed almost 40 years old and are out of compliance with state law.
Reader Comments(0)