Anchorage residents could soon decide whether to adopt a 3% city sales tax aimed at investing in public safety, infrastructure, housing and child care, while easing property taxes.
Mayor Suzanne LaFrance said Wednesday that her administration is finalizing its proposal now. The Assembly would have to approve it before it’s placed on the spring ballot.
LaFrance said the proposal comes as the city faces a dire financial future. State and federal support has dwindled, forcing property taxpayers to cover most of the city’s expenses.
“It's very clear that if we don't have new revenue, we are going to be facing service and other kinds of cuts,” LaFrance said in an interview.
This isn’t the first time a sales tax has been floated during LaFrance’s tenure as mayor. The Assembly rejected a 3% sales tax earlier this year, before it reached voters. That proposal, called Project Anchorage, was sponsored by two Assembly members and would’ve put two-thirds of revenue generated toward property tax relief.
LaFrance’s proposal would put one-third toward property tax relief. It would also put a third to housing and child care and a third to infrastructure and public safety improvements.
The mayor said her administration drew up the tax plan using feedback supporters of the failed proposal had gathered, as well as more community input.
“We've taken all that insight and we've put together something based on this place we're at and what our community needs and what has been reflected in those discussions,” LaFrance said. “And so we think this is the right time for this proposal.”
LaFrance’s administration estimates the sales tax would generate between $150 and $180 million annually.
While sales taxes tend to be regressive, impacting lower-income people more, city officials estimate a large chunk of the tax wouldn’t be paid by residents.
“It looks like greater than a third of the sales tax revenue would be paid for by non-residents of Anchorage,” said Nolan Klouda, policy director for the mayor. “That's our commuters, that's tourists, that's maybe seasonal workers who are here temporarily.”
The mayor’s administration plans on rolling out its final proposal next week, and the Assembly will introduce the measure on Nov. 18. In order to get the tax on next April’s ballot, Assembly members would need to approve the measure by mid-January, with at least eight members in support.
