The Haines Assembly passed the FY20 budget on Tuesday night. Though substantial state budget cuts loom, the borough did not make significant reductions to spending.

Considering the drastic statewide budget cuts, the main thing that stands out about the Haines FY20 budget is how normal it is. Borough Manager Debra Schnabel proposed a budget that, for the most part part, retained last year’s funding.

The assembly was slow to adopt the local budget in hopes that the state would pass its budget first. That way they would have a better idea of what kind of state cuts would come down the line and how the local budget would need to compensate.

The most contentious piece of the proposed budget—a property tax hike—was intended to offset that potential loss of income.

“In the managers budget we were assuming the school debt wouldn’t get funded at all, which is what was in the governor’s budget,” explained Haines Borough Finance Director Jila Stuart.

The biggest potential state cut to the Haines budget is the $900,000 per year Haines receives as part of the school bond debt reimbursement program.

Because of that, the manager’s budget proposed a property nearly 3 mills higher than last year. That’s equivalent to $300 of tax on $100,000 of property value. It’s a substantial increase.

Since the manager’s proposed budget was released, the legislature fully funded the program. But that funding is still at risk of a governor’s veto.

Resident and business owner Sean Gaffney said a preemptively increased mill rate was unnecessary because the borough has enough saving to foot the bill.

“In the event that the governor does decide to strike it, to line item it, I think that would be an appropriate place to dip into our reserves on a one-time basis,” he said.

“And I’m careful about guarding the piggy bank, I’m a ‘guard the piggy bank’ kind of guy.”

The assembly agreed. Tuesday night, they decided to assume the debt reimbursement would be fully funded by the state. They passed only a slight increase to property taxes, just what the borough would need to pay its share of the school debt—about $20 on every $100,000 of value.

The risk is that if the governor does veto the funding, the borough would have to dip into savings.

“I hate relying on reserve funds, but I hate overtaxing far more,” said Assembly Member Sean Maidy.

“And this is a gamble that we’re putting forward… On one side of the  coin, it’s coming out of the reserve fund. On the other side of the coin, it’s coming out of the pockets our tax payers.”

The boroughs current reserves are about $2.8 million.

The assembly considered the FY20 budget over the course of six weeks and three meetings. And though it passed in a 5 to 1 vote, there were rumblings of discontent among assembly members and the public.

Assembly Member Brenda Josephson was dissatisfied with the budget process and Assembly Member Tom Morphet decried an increase in wages for government workers while non-profit funding was cut. They both voted against the budget.

“The budget proves I was largely a failure on the assembly. I have not been able to curb to voracious appetite of government. I have to been able to add to the great organizations, the non-profits we have,” he said.

His motion to increase spending to the community chest did not receive a second. The borough funded the community chest at $37,000 last year, and reduced that spending to $20,000 this year. But they increased the budget for tourism spending by $15k, which the borough says usually goes to non-profits like the American Bald Eagle Foundation and the Alcan 200.

The Chamber of Commerce represented local business and said they would like to see more cuts to spending, putting the borough in line with the state. But the assembly passed a budget that resisted the significant cuts to services modeled on the state level.


A previous version of this story stated that there was only one vote against the budget. There were two.