10-cent-a-gallon gas tax gets Anchorage Assembly OK

Drivers will pay an extra 10 cents per gallon at the pump in Anchorage starting next March, with the Anchorage Assembly's passage Tuesday night of a new local tax on gasoline.

Mayor Ethan Berkowitz and other officials pitched the fuel tax as a way to reduce the city budget's reliance on property taxes.

City officials expect to net $14 million per year in annual revenue from the gas tax, which comes on top of an existing state tax. About one-fifth of the revenue will come from tourists, commuters and other non-Anchorage residents, city treasurers estimated.

A car owner who drives 10,000 miles a year, at 23 miles to the gallon, will pay an estimated $43 more annually for gas, according to a memo accompanying the measure.

[Also from Tuesday's Assembly meeting: Empty federal property in heart of Midtown Anchorage may someday have apartments, shops]

Meanwhile, the average homeowner will see a $131 reduction in property taxes in 2018, said city treasurer Dan Moore. More than half of Anchorage's roughly $500 million budget this year came from property taxes.

The gas tax takes effect March 1, 2018. It originated as a recommendation from the city's Budget Advisory Commission. Commissioners highlighted concerns that the city's taxing system wasn't fair.


"We need to diversify our tax base, so property taxpayers aren't hit continually, time after time," said Assemblyman Pete Petersen at Tuesday night's meeting.

The gas tax is a tax on a specific good rather than a broad sales tax and can be adopted directly by the Assembly under city law, instead of going to voters, though Assemblywoman Amy Demboski, the sole opponent of the tax, tried to put it to an advisory vote.

A representative of the Alaska Trucking Association told the Assembly the tax would burden the state's road transportation industry. But Al Tamagni, the chair of the Budget Advisory Commission, said that other cities already charge a similar tax.

The tax can be automatically adjusted for inflation in five years, the Assembly decided.

Also during Tuesday's meeting, the Assembly raised ambulance transport fees $100 to cover what fire officials have described as a dramatic rise in medical calls the past seven years.

Both votes came after a hearing on Berkowitz's proposed 2018 budget. Dozens of people testified and made calls to restore cuts or bolster a variety of services, from a needle exchange program to the Anchorage library system to the public transportation system.

Devin Kelly

Devin Kelly was an ADN staff reporter.