Anchorage city leaders are proposing a one-time tax increase to raise millions of dollars for the Anchorage School District, which faces an $83 million budget shortfall.
Mayor Suzanne LaFrance said she’s requesting the Assembly set aside a slate of revenue proposals, including her office’s proposed 3% sales tax, in order to focus on the $12 million education tax levy.
“Over the last several months, we have been having a vital conversation around the municipality's long-term fiscal health and the need to diversify our revenue, but the crisis facing our schools is too urgent to wait,” LaFrance said at a news conference Monday morning.
If approved by the Assembly, the tax would go on the April city ballot. If voters pass the tax, city officials say Anchorage property owners should expect an increase of $27.40 per $100,000 of assessed property tax value.
ASD Superintendent Jharrett Bryantt said, over the past decade, inflation has made budgeting difficult for the district, which has seen declining enrollment and a large exodus of teachers. The state Legislature approved an increase to per-student funding last year, even overriding a veto from Gov. Mike Dunleavy to keep the funding intact, but Bryantt said it doesn’t fully fill the gap.
“While the $700 increase did provide relief, it did not fully restore what schools have lost,” Bryantt said. “As a result, even though we're in the process of making significant reductions outside of the classroom, deeper than we've cut in many, many years, ASD is still facing difficult choices for the '26-'27 budget.”
State law puts a cap on how much a city can tax for education, and Anchorage typically taxes to that limit. However, the per-student funding increase at the state level allows Anchorage officials to increase the amount the city taxes for education, Bryantt said.
He said the money from the tax levy would go entirely to addressing high class sizes.
“If voters approve this levy, I will commit to directing these dollars to teaching positions and essential student services,” Bryantt said. “Manageable class sizes are at the top of the list of what our parents desire for their children.”
The proposed tax levy comes at the expense of LaFrance’s proposal for a 3% sales tax, which she initially wanted the Assembly to put on the spring ballot. Her administration has said the city faces a fiscal cliff, and funding from the sales tax would’ve gone toward child care, housing, public safety, capital projects and property tax relief.
LaFrance said the tax levy is a more immediate solution to support another struggling city service: education.
“We believe it is too much to have two revenue measures on the ballot,” LaFrance said. “A sales tax proposal won't generate revenue for one and a half to two years or so, whereas the levy will be immediate.”
Though LaFrance is setting aside her sales tax proposal, for now, she said the city still faces a tough financial future.
“We are still approaching the fiscal cliff, and the municipality faces budget gaps in the next few years,” LaFrance said. “We will be presenting scenarios for potential service cuts.”
Assembly members plan to introduce the tax levy proposal during their meeting Tuesday night, said Vice Chair Anna Brawley. Brawley is one of the co-sponsors of the tax levy, along with members Erin Baldwin Day and Felix Rivera. In order to put the tax on the April ballot, eight members would need to approve it by Jan. 27. Brawley also introduced a 2% increase to the city’s bed tax, but she said she’s willing to set her proposal and the mayor’s sales tax proposal aside to focus on education funding.
“I know this conversation is not over, and so for my part, I am happy to set aside the revenue measure for the time being,” Brawley said. “But I will work with my colleagues, with the mayor, and with others in the community, to really continue that conversation and bring forward, you know, what kind of city do we want to be in the future.”
Bryantt said the tax levy won’t fully address the district’s budget shortfall, but he’s hopeful it will hold the district over while state leaders work on a long-term budget solution.
“We do anticipate that there will be a change in state leadership as we look ahead towards the governor's race, and we are yearning for a long-range fiscal vision and fiscal plan for the state and specifically for education,” Bryantt said.
Anchorage’s municipal election is scheduled for April 7.
