An increased allocation of state money for community jails allowed the Haines Borough Assembly on Tuesday to adopt a budget that holds the tax rate steady in the townsite service area.

Borough manager Mark Earnest previously proposed a .29 mill increase in the townsite, from 11.26 to 11.55, for the upcoming fiscal year that starts July 1.

A mill is equal to $1.00 of tax for each $1,000 of assessment.

Tuesday’s decision to set the rate at 11.26 is expected to save taxpayers $42,300.

Earnest said money from a community jails service contract with the state of Alaska came in at $335,187, which was $221,000 higher than expected.

"The increase in money that we got from the state is a real blessing in a way," said member Joanne Waterman. "The $221,000, as I understand it, is an increase above what we usually receive from the state, due to a restructuring of how that money is distributed through the communities."

Jila Stuart, borough chief fiscal officer, said the community jail money goes in the townsite fund.

A memo from Earnest and Stuart explained the process for proposing the budget amendment.

"During the budget review process the Assembly discussed the idea of rolling back the mill rates in the (townsite) to the 2010 levels," they wrote. "A decision was put off pending further information about state revenues."

Waterman credited member Jerry Lapp for first suggesting the townsite rate could be trimmed with favorable state funding.

The budget was adopted on Tuesday following a third public hearing, which drew no comments.

Stuart said the total budgeted expenditure for fiscal year 2012 is $14,092,000, from $11,724,503 when the budget was adopted last year.

She said much of the increase is due to expected grant expenditures.