Haines Borough finance committee previews FY27 budget, flags $2M gap and 0.8-mill cut after bond payoff

Acting Borough Manager and Finance Officer Miss Stewart presented the Haines Borough manager’s FY27 budget to the finance committee, saying the April 1 document projects about $43,000,000 in revenues and roughly $45,000,000 in expenditures and will rely in part on prior-year fund balance to cover the shortfall.

The presentation, given at a public finance-committee meeting, outlined that the higher revenue total reflects large, mostly one-time capital inflows: Miss Stewart said the budget “includes things like $20,000,000 from Merad for the Lutec Dock project, and several million dollars from DEC for water and sewer projects.” She also told the committee the operating-only picture is much smaller: if capital projects are excluded, operating revenues are roughly $14,000,000 and operating spending is a little under that amount.

Why it matters: the packet frames FY27 as a transitional year in which capital grants and project funding lift overall revenue but the borough still faces an operating-year gap. Miss Stewart said the manager proposes using parts of several fund balances (about $200,000 from Fund 01, $100,000 from Fund 02 and small amounts from other funds) and a $340,000 transfer from the permanent fund to the area-wide general fund to help offset property taxes.

Committee members pressed on tax and debt questions. Miss Stewart told the committee that the borough-wide 10-mill cap applies to all mills but Alaska law exempts debt-service mills from the cap, which has left many local mill rates above 10 mills in practice. She discussed a local code provision that exempts road-maintenance service-area mills from the cap and said that paying off the borough’s 2005 school construction bonds in FY26 allows the FY27 mill rate to drop “about 0.8 mills,” which she estimated is roughly $200 on a $250,000 home.

Committee debate focused on how to close recurring shortfalls. Some members pressed for a more aggressive, systematic review of spending to reduce reliance on fund balance, while others cautioned that cost increases in rural Alaska — notably fuel and personnel costs — constrain the borough’s ability to cut without trimming services. Miss Stewart said some intergovernmental revenues arrived late and can materially change final balances; she noted the borough recently received roughly $230,000 in Secure Rural Schools funds that reduced the FY26 draw on savings.

Other details in the manager’s package included the first full year of a seasonal sales tax (projected to bring in roughly $4.8 million in general sales tax plus about $318,000 in special sales taxes), no direct nonprofit appropriations (left for the assembly to consider), an initial ambulance-billing fee, and budgeted allocations for state and federal lobbying contracts.

Public commenters urged broader changes and local revenue options. One attendee proposed targeted user fees — for example, a dedicated fish tax or a local gasoline tax for roads — to free other funds for capital work. Mr. Gray urged structural reform of local government and proposed building vocational-education capacity as a workforce and revenue strategy. Barbara Nettleton urged that the budget be driven by needs, and suggested the borough use property it controls to generate income.

What’s next: Miss Stewart said the manager’s FY27 budget will be reviewed and refined through public meetings and assembly hearings over the next two months. The finance committee did not take any formal budget vote at the session; the packet and presentation will be posted to the borough website as part of the public record.