Why nobody likes Anchorage’s potential alcohol tax but its powerful sponsor

In an effort to help pay for growing costs from substance abuse, Anchorage could weigh a potential new tax on alcohol. The measure is an ambition of the long-serving chairman of the Anchorage Assembly. But it faces an uphill battle, with criticism coming from multiple sides.

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Since first getting elected in 1991 to represent a district in Midtown Anchorage, Dick Traini has spent the majority of the last 26 years on the Assembly.

In between election defeats and stints away, Traini has chaired the 11-member body five separate times. And one of the most frequent targets of his criticism is all the ways the city ends up paying for extra expenses associated with alcohol.

“It does not even begin to cover its costs on society,” Traini said during a recent interview.

In meetings on homelessness, public safety, downtown renewal, budgets, parks and trails, Traini and the Assembly hear a consistent chorus of complaints and consternation about all the ways residents pay for services directly related to problems that arise from drinking.

“My tax dollars still go to support the police department that deals with the problem of alcoholism. My tax dollars still go to support Health and Human Services to clean up a problem that alcohol creates,” Traini said, rattling off some of the most frequently deployed municipal resources.

In a town, and a state, where alcohol plays a big role, Traini does not drink.

“I grew up with a family that drank constantly,” Traini explained. “Every Saturday and Sunday night, the family would get together at my grandparents’ place, where I would watch my aunts and uncles and my grandparents play poker and drink all weekend.”

Traini grew up in Washington, and came up to Anchorage with the Air Force in 1971. He spent a career in the military and civil service, and with his wife raised eight kids in Alaska. He concedes that his abstinence probably guides some of his policies aimed at prohibitions on alcohol and drugs — he is a frequent critic of commercial cannabis, even as he helped shape the local rules over the industry as it has come into existence. But he also insists that the city’s relationship with booze has lead to an irresponsible financial burden on public resources.

Which is why he wants to add a new wholesale tax on alcohol to raise extra revenues.

“We could use it for the police department,” Traini offered as an example of where funds might go. “It could be treatment beds. It could be anything we can do to stem the tide of alcoholism or its effect on society.”

Alcohol sales are already taxed by the state. In fiscal year 2016, more than $42 million was taken in. But it’s a perennial source of frustration for Traini and many other officials in Anchorage that the tens of millions of dollars collected each year can’t be specifically dedicated to pay for treatment options in particular communities, even though roughly half the money goes into the Treatment and Prevention Fund. A frequent perspective voiced at Assembly meetings is that of the money spent by the state Anchorage isn’t getting a proportionate share of what it chips in.

Traini wants a local tax so officials can designate the money. His proposal would introduce a two percent tax that could eventually go as high as six percent in the future if the Assembly chooses to raise it.

But the politics are not on Traini’s side. Because it proposes to add new taxes above the city’s charter-mandated tax cap, it will take a super-majority of eight Assembly votes to put the measure on the April ballot. Then it needs to get a majority from voters. Traini’s similar efforts in the past have failed. But he insists the municipality cannot adequately address a worsening problem at current funding levels.

“Our population has grown dramatically over the years,” Traini said. “There’s just not the money out there to take care of this problem.”

According to Traini, if approved, the tax would raise about $1.4 million in its first year.

But industry groups don’t plan on letting things get that far. The Alaska Cabaret, Hotel, Restaurant and Retailers Association and other similar groups have a war-chest ready to fight the tax proposal if it advances.

“We have $100,000 coming from Alaska CHARR,” Darwin Biwer, owner of the downtown Anchorage bar Darwin’s Theory, said. “Then we have the manufacturers, we have the distributors, we have the whole alcohol industry against this sort of thing.”

Biwer believes the tax places an unfair burden on businesses and employees in a broad swath of the Anchorage economy. And he says it would penalize bars and restaurants for behavior that’s happening mostly in the streets by a small subset of drinkers dealing with dysfunction and mental health issues. Biwer thinks taxing alcohol to curb social problems is misguided.

“Alcohol is not the cause, it is an effect,” Biwer said.

That’s not a view shared by public health advocates, many of whom say the industry has too much influence in developing alcohol-related policy in Anchorage. Some advocates point toward the upcoming bill revising Title 4, the state’s legal code on alcohol that is set to go before lawmakers during the next legislative session as their primary focus for reforms.

Jeff Jessee is the former CEO of the Alaska Mental Health Trust Authority, and has spent years working on alcohol policy in Alaska. According to Jessee, the pending changes to improve state alcohol laws represent years of work getting regulators, public health advocates and the industry all in the same boat.

“This is as close to a consensus bill as you’re going to get in an area where there’s a variety of strongly held positions,” Jessee said.

The worry in some corners is that Traini’s tax proposal could court a fight with the industry that damages a fragile relationship between stakeholders typically at odds with one another just before a big legislative lift in the coming session.

The measure goes up for public testimony before the Assembly on December 19th.