Anchorage Assembly weighs new taxes ahead of town halls

Anchorage Assembly Chair Felix Rivera speaking at a press conference at City Hall about listening sessions for new revenue measures on Jan. 3, 2020. (Zachariah Hughes/Alaska Public Media)

Anchorage needs more money. That’s according to the municipality’s Assembly, which is weighing three different tax proposals to increase revenue after years of budget cuts to most municipal departments. But before deciding which measure to put on the April ballot for voters to decide on, the Assembly will hold listening sessions with residents.

During a Friday press conference in a City Hall conference room, Assembly Chair Felix Rivera laid out the basic problem confronting the municipality.

“Just in the last decade,” Rivera said, “state aid to the municipality has been reduced by approximately $100 million. That’s a significant reduction.”

The decline in state funds is mirrored by a drop in federal dollars flowing to local governments, as well.

There are different ideas among the 11-member body about what should be taxed. Broadly speaking, two of the proposals are to tax alcohol, and the third measure is a sales tax.

The alcohol taxes diverge quite a bit: the more progressive version would put a 5 percent tax on alcohol sales, with the resultant funds dedicated to a broad range of causes related to public safety and well-being, including early education, domestic violence prevention and substance abuse programming. The ordinance’s sponsors are Rivera, Forrest Dunbar and Austin Quinn-Davidson. A similar measure went before Anchorage voters last year and was defeated after strong opposition by the city’s alcohol and hospitality industries. According to Rivera, such a measure could raise $11-$15 million for the municipality.

The second alcohol tax proposed by John Weddleton is more moderate, starting at 2 percent, though with the potential to eventually go as high as 5 percent, and with a narrower focus on behavioral health and homelessness programs.

A third option is a three percent sales tax introduced by Eagle River assembly member Fred Dyson. As its currently crafted, half of the funds raised would be used for property tax relief, the other half for public safety measures to combat crime.

Ideally, Rivera said, just one will go to voters to approve or reject during the April 7 elections.

Although the municipal budget has nudged upwards in recent years, most of the spending increases have gone to the police and fire departments in an effort to improve public safety. Otherwise, according to Rivera, funding for other city services has stayed flat or declined.

“The only way that we can deal with some of the very serious issues that we have is by increasing revenues,” he said. “I think we’ve done as much as we can with the budget that we have. You look at different departments and they’re at the lowest levels that they’ve been in years.”

Six of the 11 Assembly members’ terms expire this year, including Rivera’s. Taxes are generally unpopular with Anchorage voters. The Assembly’s solidly liberal majority might be put at risk with so many candidates potentially running for re-election next to a new tax. But Rivera believes it is the only option.

“We need more police, we need more non-sworn officers, we need more bus routes,” he said. “There’s a lot of needs in the community, there’s a lot of wants in the community. I don’t think we can wait another election cycle for the politics to be ‘right’ to have this discussion, we need to have it now.”

The Assembly is holding three listening sessions in midtown, Chugiak and Girdwood, starting Tuesday, Jan. 7.