As the Haines Borough works towards a municipal budget for the coming fiscal year, members of the assembly are trying to figure out how to weather the current economic downturn. While most of the assembly is pushing to reduce or eliminate spending on nonprofits like the Haines Economic Development Corporation and the Haines Sheldon Museum, others say that now is the time to dip into savings from the town’s permanent fund.

During a meeting Tuesday, the borough assembly and staff reviewed the latest draft of the municipal budget. Following direction from the assembly, the Borough Manager Debra Schnabel rewrote the next fiscal year’s budget assuming a 50% reduction in sales tax revenue. 

“So my job was to find $349,248 in cuts,” Schnabel said.

She went over the various budget cuts she made in the latest draft. One of the largest was a $60,000 reduction in the tourism and economic development fund because of reduced visitor traffic this summer. There were also $34,000 reductions to the planning office and the library and a $40,000 cut to the museum among others. 

“I feel badly that I didn’t make the number of $349,248,” Schnabel said. “But I got $325,338 so we still have $23,910 to go.”

Schnabel said that in addition to sales tax revenue, one of the largest gaps in the budget is the loss of state funding to help the borough pay off the bonds that were used to construct the Haines School 15 years ago. 

“The question that I think we have before us as a community is how to pay the balance of the school bond debt,” Schnabel said. 

Assembly member Zephyr Sincerny had asked the manager to examine how much money could be raised by increasing the mill rate for property taxes. According to Schnabel, raising property taxes by 1 mill would generate $328,760 in revenue. 

But most of the assembly felt that raising taxes should not be explored at this time. 

Assembly member Paul Rogers said he wanted to see deeper cuts, with the borough divesting completely from some nonprofits and public facilities. 

“I would like to see us cut [Haines Economic Development Corporation] 100%. I would like to see us cut the Chilkat Center for the Arts and revert that back to its previous real owner. I would like to see the museum cut to a seasonal situation. May through September I think would be the appropriate time frame,” Rogers said.

Assembly member Brenda Josephson agreed, saying she would like to reduce borough funding for the museum by half and that she could no longer justify funding for HEDC.

“Why I say that is because I’m constantly getting comments from the public. They do not see the value in it. They see a regurgitation of information that’s provided. The childcare study is an example,” Josephson said. “So we’ve got to approach things differently.”

Not everyone on the assembly agreed that the borough should pursue more budget cuts. Assembly members Zephyr Sincerny and Stephanie Scott suggested exploring other options like drawing on the borough’s permanent fund or raising taxes. 

Sincerny said he felt that organizations like HEDC are important during a time of economic uncertainty. 

“I think if there’s ever a time to keep economic development, being in the midst of this COVID pandemic and trying to boost our economy and help us come out of it–That’s the time we would need HEDC to bring in funds and it is a vehicle that I believe is set up and could help with management of CARES act funding,” Sincerny said.

Federal funding from the CARES act is a big question mark for the budget. Alaska has received over a billion dollars in relief from the CARES act. According to the governor’s plan, the Haines Borough is slated to receive $4 million in support. However there is still disagreement among state legislators about how those funds can be distributed and for what purposes.