Anchorage voters will weigh 15 ballot propositions during next month’s municipal election. The highest-profile proposition would use marijuana taxes to fund early education efforts in the city.
Trevor Storrs is president and CEO for the nonprofit Alaska Children’s Trust, one of the main supporters of the initiative. One of the first things he wants to make clear is that this ballot initiative is different from the alcohol tax passed in 2020.
“This is not a new tax,” Storrs said. “The marijuana tax already exists. It’s at 5 percent. It’s about $5-6 million.”
The taxes currently go to the city’s general fund, but the new proposition would specifically allocate existing marijuana taxes to child care and early education initiatives.
Storrs says Anchorage residents are struggling to find child care in the city, sometimes leading to a loss in wages just to watch their kids.
“Here in Alaska, it’s about $165 million in lost revenue because we have people that aren’t able to work, calling in because they don’t have child care, things of that nature,” Storrs said.
He says a low supply of child care facilities is making it expensive as well.
“Anchorage residents are paying 14 to 17 percent of their annual income towards child care,” Storrs said. “That is more than what you would put towards university in a year.”
He says the federal recommendation is for people to spend no more than 7 percent on child care. Additionally, Storrs says that child care workers are often paid less than what you’d make in a retail job, and he thinks the funding could help support those workers.
“We need to make sure that those people that are coming in — they’re working with our most precious, important resource, which is our young minds,” Storrs said. “And making sure they are equipped and well trained in how do you support early childhood development.”
The proposition would also establish a municipal board to monitor how that money is spent. Storrs hopes that some of the money could be used to match federal and state early childhood grants, to further bolster the field.
While there hasn’t been a lot of organized opposition to Proposition 14, marijuana industry leaders have a few concerns. Ryan Tunseth is board president for the Alaska Marijuana Industry Association.
He says one industry concern has to do with how the marijuana taxes are moved. Under the proposition, the money that the city collects in taxes would be removed from the Anchorage tax cap — that’s the total amount of money the city is allowed to tax property owners. Tunseth says removing that roughly $5 to 6 million from the tax cap would free up space for the city to tax property owners.
“Our feeling was that this was kind of a clever way to actually increase the overall tax cap and be able to tax Anchorage residents more,” Tunseth said.
Storrs says the proposition was amended to address some of those tax cap concerns. If voters approve the proposition, the Anchorage tax cap would be lowered by a million dollars in 2024.
Tunseth says another growing concern from marijuana businesses is that there are still some issues they’d like to see fixed in the state tax structure. He says there have been recommendations to change the tax from being levied on the cultivation of marijuana, as opposed to on the sale of marijuana.
Additionally, the rising production of hemp presents a new issue. The federal farm bill passed in 2018 legalized the industrial growth, cultivation and sale of hemp, a plant derived from cannabis with considerably less THC than marijuana. THC is the psychoactive component of cannabis that gets users high.
However, hemp and marijuana are regulated differently, and Tunseth says hemp cultivators can extract cannabidiol, or CBD from hemp. CBD is a similar compound to THC and it also exists in marijuana, but it doesn’t have the same level of psychoactivity. However, through a process called isomerization, Tunseth says you can convert the CBD in hemp to THC.
“You can actually get really high amounts of THC into these products that are being called legal, or ‘farm bill legal,’” Tunseth said. “And so it’s a big loophole.”
Not only are officials worried that these products can be sold without the same level of oversight as marijuana, but Tunseth says these products aren’t taxed.
“All of those sales would technically fall outside of what is considered marijuana, or the marijuana tax,” Tunseth said. “So the other feeling that industry had was very much that let’s fix some of these issues first because we think that you could probably get a larger piece of the pie.”
Tunseth says the AMIA supports funding early child education efforts, and isn’t entirely opposed to the notion of using marijuana taxes to do it, but he says he would like to see changes in tax structure before it goes through. While not in direct opposition, he said the industry is “lukewarm” on the prospect.
Mail-in ballots for the Anchorage municipal election will be accepted until April 4 at 8 p.m.