Haines Borough testifies against bills that would reduce municipal revenue

The Haines Borough testified before the state legislature last week in opposition of a pair of budget proposals that would reduce municipal revenue. Senate Bill 63 would eliminate state assistance for paying off the costs of building the Haines school and Senate Bill 64 would prevent the borough from collecting revenue from the state’s raw fish tax. 

Funding for the school district makes up the largest portion of the Haines Borough budget. At $1.8 million, it represents about a third of the borough’s expenses. It is also the local service that would lose the most revenue under Governor Mike Dunleavy’s proposed budget.

The school stands to lose over $600,000 dollars from the state’s per-student allocation. In addition, the Dunleavy administration introduced Senate Bill 64, which would eliminate the state’s school bond debt reimbursement program. The program provides state money to offset the cost of building new schools.

At a meeting last week, Borough Manager Debra Schnabel testified before the Senate Education Committee in opposition of the bill. She explained that the Haines Borough used it after consolidating the primary, middle and high school buildings into one facility in 2005.

“Very definitely the school debt reimbursement program was a part of the decision that we made as a community to go forward with the construction of the school,” Schnabel said.

The borough took out more than $17 million in bonds to pay for the new school’s construction. If Senate Bill 64 were adopted, the borough would stop receiving annual payments of $900,000 from the state to help pay off those bonds.

Schnabel said that if the borough were to assume the entire debt from construction, the borough would have to increase property taxes to offset the cost. A mill is equal to one dollar for every thousand dollars in assessed value of the property.  

“7 more years of taxing our community at 14 mills, approximately, would be devastating to the community,” Schnabel said. “We anticipate already that it will be impossible for many people to continue to live in our community with that high of a levy of property tax.”

The Haines Borough also testified in opposition of Senate Bill 63 last week. The bill would keep raw fish tax revenue in the state’s hands rather than sharing half of it with the municipalities where the fish is collected or processed.

Haines Borough Finance Director Jila Stuart told the Senate Community & Regional Affairs Committee that raw fish tax revenue brings in 3 to 10 percent of the borough’s general fund revenue.

“We try to use that money to support the fishing industry and support infrastructure that fishermen rely on. We also use that money to support schools in Haines. For those reasons we don’t support Senate Bill 63, and we would urge you not to put it forward,” Stuart said.

The current legislative session ends on April 14, however, the legislature is allowed to extend it until May 15. That is the deadline for passing a state budget.