Mayor Mark Begich remarks
Fiscal 2005 Budget Presentation
1 p.m.; Oct. 1, 2004; Mayor’s Conference Room

Good afternoon – thanks for being here.

Today we present our proposed budget for Fiscal 2005.

I’m relieved to describe this budget as holding the line, with some new significant investments in public safety. Our budget proposal for next year adds 20 new police officers and 25 new firefighters, as we make down payments on the most important services any city can provide its citizens – ensuring their safety in their homes and on our streets.

The 2005 budget proposal is a dramatic contrast to last year’s. Then, we faced Anchorage’s most severe budget challenge since the oil price crash of the late 1980s with a $33 million budget gap.

You’ll recall we described it as a “perfect storm” of huge state budget cuts, the constraints of our property tax cap, and increased demand for services for a growing city.

Thanks to the sacrifice of city workers, the cooperation of the Assembly and some tough budget decisions, we balanced the 2004 budget.

And the ‘05 budget we deliver to the Assembly today is also balanced and puts us on a course for long-term stability, predictability and growth.

This budget reflects the three priorities Anchorage residents tell me they feel most strongly about: public safety, transportation, and economic development.

It funds essential public services, from road maintenance to public health. It provides for modest but targeted investments in necessary public facilities, especially roads.

And if the Assembly and public agree to our four-part tax reform package, it provides tax relief to Anchorage property taxpayers.

After years of increasing the burden on property taxpayers, this budget reverses that trend. Today, 61 percent of the city’s budget comes from property taxpayers. That’s a 13 percent increase since 1989, when just 48 percent of city services were financed by property taxes.

Under this proposal, the reliance on property taxpayers to fund public services drops from 61 to 57 percent, as we diversify the city’s tax base.

Let me hit the highlights of our budget proposal.

This $329.9 million budget is an increase over the current year – about $20 million. The biggest factors driving the budget are personnel costs. Increased health care and retirement costs are two of the major factors.

As I mentioned, we propose the addition of 20 new police officers and 25 new firefighters, which will cost $2.8 million.

You’ll remember that when we came into office, we directed a major review of our police department. It found that Anchorage is 93 officers short of where our city should be to protect the public. Too many crimes were going uninvestigated.

We’ve embarked on an ambitious effort to rebuild the Anchorage Police Department. We expect to add new officers each year, including the 20 new ones next year. We’re aggressively recruiting for new officers, especially those from minority groups to better diversify the force.

For fire, we recently announced a major reorganization of the department. Because of that and the department’s better management of overtime and leave, we’re able to add 25 new firefighters to better protect the public.

This budget also includes modest raises for most municipal employees. We asked those employees to forego increases this year as we worked through the huge budget gap. Thanks to their sacrifice, we saved about $3 million in 2004. I commend all city employees and the unions that represent them for sharing the burden.

Our ’05 budget also includes a number of significant areas of cost-savings. Thanks to the Cooperative Purchasing Authority the Assembly recently approved, we project about $3 million in savings this year alone from the way we purchase equipment and supplies.

We expect to save another $2.5 million through health care plan modifications this year. Through self-insurance and reforms like purchasing prescription drugs from Canada, we can save big.

We’re also investing in new technology to generate efficiencies now and savings later. For example, we’ll soon launch a web-based computer program to streamline planning and permitting.

APD is also upgrading its computers and technology for better record-keeping.

On the capital budget, you’ll see a continued emphasis on our highest priorities – relieving traffic congestion. We propose a road bond of about $32 million, compared to $46.5 million approved by voters last April.

This bond may change between now and April depending on state or federal actions, or lack of action on transportation funding.

Next year’s bond will focus on traffic congestion relief at some of our busiest roads – Lake Otis and Tudor, Northern Lights, 36th, Arctic and Dimond, among others.

As you know, we’re asking voters to approve funding for a new civic and convention center next April through an increase in the hotel/motel tax. So we don’t want to overwhelm or distract them with other bond proposals.

On municipal utilities: they all continue to be profitable and well run. My goal is that every city-owned utility show a return to their owners – the taxpayers of our city.

All the utilities will be contributing to the city treasury this year through payments in lieu of taxes known as MUSA and MESA payments. This ensures that they operate like private businesses.

As is always the case, this budget is a work in progress. Our presentation today really starts a process which will continue over the next six weeks until final Assembly approval on November 16th.

We will continue to work on our expenses and revenues and I anticipate we will have additional positive news before passage of the budget.

The Budget Advisory Commission already has held two public meetings to solicit public comment.

On October 15, the Assembly holds its first work session on the budget, beginning its own process of examining it, asking hard questions, and hearing from the public. We’ll be fully engaged in that entire process.

Finally, I want to boast about our new Budget in Brief booklet. This fresh-off-the-press booklet provides basic information about the budget in simple terms.

It’s part of our continuing effort to supply essential information about city government to Anchorage residents.

Now I’m pleased to answer any questions . . .

###