The Anchorage Assembly rejected a sales tax proposal March 18 after months of deliberation. If approved by voters, the measure would have instituted a 3% tax on most goods, with two-thirds of the revenue going to property tax relief, and the other third supporting capital projects in the city.
The measure was sparked by Project Anchorage, an initiative to revitalize the city led by the Anchorage Economic Development Corporation.
Supporters of the tax said it would allow Anchorage to invest in itself and lessen the tax burden on property owners. Critics said it would have disproportionately impacted low income residents.
AEDC president and CEO Jenna Wright said that she’s disappointed about the Assembly vote but optimistic for what’s next.
Listen to the interview with Wright above. The following script has been lightly edited for clarity and length.
Jenna Wright: Project Anchorage was admittedly a proposal that was going to be a huge change for Anchorage. One of the things that I think we took away from the Assembly meeting last week is we needed a little bit more time and a little bit more conversation to refine the proposal to be where it needed to be in order for Assembly members to feel comfortable.
Ava White: What do you think those biggest stumbling blocks were for the Assembly members that voted against the measure?
JW: There were a few things that were expressed by Assembly members during that meeting, as well as some other work sessions that we have been a part of over the last nine months or so.
One of them was that a big chunk of the revenue was going towards property tax relief, which is something that a lot of residents have been calling for for a long time, because Anchorage has some of the highest property taxes in the entire country. But on the other hand, there wasn't a way for us to apply a direct, immediate benefit to renters. And so there was a lot of thought that went into how a sales tax would impact lower income households.
I think Assembly members wanted a little bit more analysis in that particular area to make sure that we could keep as much revenue in state as we could.
Another thing was weighing all of the priorities that the city has. I think from some of their perspectives, they're looking at a sales tax as a potential avenue for different types of revenue, whether that's affordable housing or snow plowing or other general government services. Whereas our focus was very much on how we can bring additional economic development and capital investment into Anchorage and so perhaps just a divergence of priority on those multiple things that the city is facing.
AW: What are we (Anchorage) missing out on without a sales tax?
JW: Right now, the majority of revenues are coming from property taxes, and so by having a different vehicle of a sales tax, you capture revenue from different sources than you would if you're only collecting it from property owners.
So for instance, we've got 10,000s of people that commute into our city each day and each week from the Matanuska Susitna Valley, a little bit up from Kenai Peninsula, and we're not currently collecting any revenues from those workforce commuters. Likewise, we've got over a million visitors that come into our city each year, and they do pay some sales tax if they want to grab a beer or rent a car or, of course the bed tax, which is applied to hotel rooms and Airbnbs.
But everywhere else they go has a sales tax, and so that would be a normal thing for them to be used to, and that would be a way for us to capture a little bit more visitor spending as well.
AW: A few Assembly members have implied that the conversation around a sales tax, you know, (saying) it's not over. So what's your plan now? Are you planning to, you know, step back and rework a sales tax? Or maybe assist Assembly members in reworking it?
JW: We're going to see a new Assembly within the next 30 days. We know that several members are not running for re-election, so new folks will be joining the body, and they are going to have a big learning curve and a lot of priorities that are tugging at them.
One of the things that we hope to do from the beginning is kind of sit down and explain what we are trying to do with Project Anchorage and continue the conversation with this new Assembly. Because, as you mentioned, many members, although they didn't vote for advancing the particular version of Project Anchorage forward, they recognize that there's a lot of value to this conversation, and they want to continue having it.
We are at the table for investment in Anchorage however, we can get that done with whoever, whenever. We are still very laser focused on wanting to bring this type of positive momentum to our city, and so definitely looking forward to meeting some new folks over the next couple of months as they take their seats and continue in the conversation.
