Council sets mill rate at 11.5, reduces contribution to Nome schools
By Diana Haecker
In work session after work session, the Nome Common Council is fine combing the city’s fiscal year 2026 budget, trying to balance the budget while keeping services to citizens intact and not laying off any employees.
On Tuesday night, when faced with the May 31 deadline to have the city’s contribution to Nome Public Schools nailed down, the council pivoted last minute from a $3.4 million to a reduced $2.7 million contribution to the school district. The reasoning included that the council can at a later date supplement the contribution to the schools.
In a work session prior to the regular meeting, where the council voted on the amended resolution to set the school contribution at $2.7 million, Superintendent Jamie Burgess mentioned that the school’s apartment capital fund has $2 million in it. Wait a minute, said councilmember Scot Henderson, the council was told it was $1.1 million. This changed the conversation, as it appeared the school could find more money in their own savings accounts rather than asking the city to dip deep into theirs.
The genesis of the budget discussions rested with an initial budget proposal presented to the council on May 5 that already had cuts to operational costs across departments. When the council was presented with the budget, they tried to find either more revenue or cuts to services to balance the $18,025,230 budget.
City manager Lee Smith was tasked after last Friday’s work session to find more savings. He presented a slightly leaner budget with only $75,000 additional cuts. His budget draft was based on a mill rate of 11.5 and an assumed increased sales tax to 7 percent, while leaving the $3.4 million contribution to schools untouched. The budget included cuts to NEST, slashing the Visitor Center budget in half to $100,000, and cutting departments to the bone. Any further cuts, City Manager Smith said, would be cutting services to residents and would be detrimental to the city’s operations. Smith said in conversations he heard that citizens were opposed to raising property taxes, but felt they could tolerate an increase in sales tax. Thus, he floated the idea to bring a referendum to voters in October to raise the sales tax from the current 5 percent to 7 percent.
Councilmember Scot Henderson said that his idea was to spread the pain and that the budget as presented was not a balanced solution as neither the city nor the schools were presenting any reduction in spending. He opposed the idea to not show a good effort of cutting spending, but asking citizens to voluntarily raise their expenses via a sales tax. He thought asking voters for a 2 percent sales tax hike would be a risky proposition.
After a lengthy discussion, the council landed on a reduction in the city’s contribution to the school district. “I don’t think there is anybody on this council who does not support the schools. But we have to make the city’s budget and the school’s budget work,” Johnson said. He said that if there is an emergency, the council would step in and help the schools. Pressed by the state-mandated May 31 deadline, Councilmember Mark Johnson made the motion to amend the resolution, reflecting a city contribution of $2.7 million. The vote unanimously approved the amended resolution.
In another vote, the council unanimously passed a resolution to set the mill rate at 11.5, on a value of $488 million of taxable property.
The council voted on the budget ordinances of various funds, including the general fund, in first reading. Another work session is set for Wednesday, June 4 at 5:30 pm, prior to the vote in second reading, public comment and final passage.
In other business, the council voted in first reading to amend the city’s zoning map to include a downtown mixed use district.
After the budget work session, the Nome Common Council, with all members present, convened as the Board of Equalization and voted on an appeal from Norton Sound Health Corporation, asserting that eight properties should be tax-exempt. Councilmember Cameron Piscoya, who works for NSHC, declared a conflict and was excused from voting on the matter. The properties include the housing complexes, the Kusqii House, the Wellness Center, hostel and maintenance center complex, the prematernal home and the west campus. The board of equalization voted property by property and denied each appeal.
After the 3 hour and 40 minute meeting, only few council members volunteered comments. Maggie Miller suggested to add other tax increases to the ballot come October, such as bed tax.
Scot Henderson thanked the Planning Commission to get the downtown zoning amendment before the council.
Cameron Piscoya echoed Miller’s suggestion to get other tax increases on the ballot. Adam Martinson cautioned that voters may react adverse if too many tax increases are presented on the ballot.
Mark Johnson requested from the city manager to look at installing basketball hoops around town. And finally, Mayor John Handeland asked the interested public to take initiative and help put on events such as the Memorial Day festivities or the upcoming Midnight Sun events.
The next work session on the budget is planned for Wednesday, June 4 at 5:30 p.m.