Mayor Suzanne LaFrance on Friday delivered to the Anchorage Assembly her proposal for a 3% sales tax. This balanced, three-part investment plan will strengthen public safety and infrastructure, provide direct property tax relief, and support economic growth through investments in housing and child care. 

“Anchorage is at a turning point. It is up to us to fund the future we want for our community,” said Mayor LaFrance. “This proposal is a thoughtful, balanced, and responsible plan for Anchorage residents that will allow us to secure our community’s financial future and make the crucial investments we need in police, fire, roads, housing, and our economy.”

Mayor LaFrance’s proposal is on the agenda for introduction at the Anchorage Assembly’s regular meeting on Tuesday, November 18. If approved by the Assembly, the ballot proposition would go before Anchorage voters.

The proposed 3% sales tax would dedicate funding to three specific areas:

The administration estimates the sales tax could generate between $148 and $176 million annually. Importantly, the Municipality’s Treasury Division projects that at least one third of this revenue will be paid by non-residents, including commuters and tourists.

The proposal would stabilize the Municipality’s finances. Following years of sharply declining state support—which once funded nearly a third of Anchorage’s operating budget and now provides less than one percent—this new revenue source is essential.

Years of reduced state support have increased the reliance on property taxes and resulted in a growing backlog of critical maintenance and safety upgrades for public facilities, roads and trails.

Municipal officials say the Municipality must establish a new source of revenue or cut critical services in future budget years.

At the same time, Anchorage has seen years of outmigration and stagnant economic growth. The Mayor’s proposal includes new investments in child care and housing to make the community more affordable—and encourage families to stay and participate more fully in the workforce.

While some sales taxes can be “regressive,” meaning they disproportionately burden low-income households, this proposal includes exemptions to relieve the impact. Additionally, the proposal directs the money to pay for services, critical infrastructure and investments that will benefit all residents.

Items exempt from the proposed sales tax include:

“It’s clear we can’t rely on state funds anymore. A sales tax is a proven, common-sense solution used by most Alaska communities. It allows non-residents who use our services and infrastructure to contribute to their upkeep,” Mayor LaFrance added. “This proposal is designed to benefit every resident of Anchorage—by easing the property tax burden and delivering necessary, long-overdue improvements to public safety and infrastructure.”

The public is encouraged to review the full text of the ordinance and provide feedback.