Mayor's Corner

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

​What is being proposed?

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. 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?

There is a shortage of public health and safety services in Anchorage. 

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?

Revenues from the retail sales tax on alcohol must be dedicated to the following purposes:

  • Funding for police, related criminal justice personnel, and first responders;
  • Funding to combat and address child abuse, sexual assault, and domestic violence; and
  • Funding for substance misuse treatment, prevention programs, detoxification or long-term addiction recovery facilities, mental and behavioral health programs, and resources to prevent and address Anchorage’s homelessness crisis.”
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.

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