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Mayor's Corner

Proposed retail sales tax on alcoholic beverages for dedicated use in support of public health and safety

2019 Ballot Proposition 9

What is being proposed?

In December 2018, the Anchorage Assembly approved an ordinance submitting a ballot proposition to the voters to authorize a retail sales tax on alcoholic beverages and dedicating the revenue to behavioral health and public safety purposes, including financing capital projects. The Assembly Ordinance and the accompanying Assembly Memorandum and Summary of Economic Effects can be found here.

Some common Questions and Answers:

Why a retail tax on alcohol?

Alcohol misuse and behavioral health issues create a significant economic and social impact in the community – for businesses that have had to shoulder increased operating costs related to increased crime and homelessness and for individuals who cannot access substance use and mental health treatment services.

A 2016 report on the impacts of alcohol on the state of Alaska lists alcohol generated costs totaling $1.836 billion to the state, approximately 40% which affects Anchorage. The report, which was presented to the Assembly in a public meeting, can be found here.

Economic Cost Table

How will the tax impact the consumer?

If passed by voters, the Assembly will be authorized to assess a 5 percent tax on all retail sales of alcoholic beverages that may be implemented on January 1, 2020. According to the Summary of Economic Effects document attached to the Assembly Ordinance and Memorandum, the result of this tax would look something like:

  • $0.40 for an $8.00 six-pack of beer
  • $0.50 for a $10.00 mixed drink
  • $1.75 for a $35.00 bottle of wine
  • $2.50 for a $50.00 bottle of liquor
What will the MOA do with this tax revenue?

Again, according the Summary of Economic Effects, the average annual projected revenue is $13 million dollars. Revenues from the retail sales tax on alcohol will be directed in the following ways:

  • Funding of citywide alcohol and substance misuse treatment programs and facilities.
  • Funding of public safety programs that deal with alcohol and substance misuse issues, such as an expansion in the Anchorage Safety Patrol (currently limited to Downtown, Midtown, Mountain View, and Fairview areas) and the Anchorage Safety Center.
  • Funding of homelessness services:
    • additional illegal camp abatement staff and resources (currently not enough staff to have robust program year-round);
    • Legally required storage for personal property seized in camp abatements;
    • Housing and support services with substance use and mental health or monitoring services;
    • Cold-weather sheltering or other emergency system needs (currently not enough space for demand/need).
  • Funding for increased models for mental health support, such as the Mobile Intervention Team or other programs assisting with substance use and mental health services to relieve police and EMS contacts with people who have behavioral health needs.

Revenue may be used to pay financing obligations for capital improvements, construction of treatment centers, or secure private investment by providing outcome payment funds in the Pay for Success initiative.

How will the tax expenditures be tracked?

Expenses will be tracked through a specific budget code and a report will be given to the Assembly each year. The use of the funds will be determined and approved annually by the Mayor and the Assembly with public input. Similar dedicated funds have helped with the development and payment of community resources such as the Dena’ina Center.

What are other Alaska cities doing?

Other local governments throughout Alaska, from Utqiagvik to Juneau, have approved a sales tax on alcohol, ranging from 3 percent to 12 percent.

How will this impact industry businesses?

In public hearings before the Anchorage Assembly, testimony was provided by alcohol industry and non-industry representatives who have indicated that this tax would have a minimal impact on their business because the burden of the tax will be paid by the consumer.  Other alcohol industry representatives testified that this tax would result in a negative impact on their businesses.

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This was prepared and funded by the Municipality of Anchorage, Office of the Mayor.

    • Mayor's Corner
    • Mayor: Ethan Berkowitz
    • 632 W 6th Avenue, Suite 840, Anchorage, AK 99501
    • 907 343-7100