Anchorage mayoral candidates weigh in on possible local sales tax

Eight candidates for Anchorage mayor answered questions Monday on a series of economic issues and ideas, including ways to stop outmigration, how to attract more people to the workforce and the possibility of a future local sales tax.

The Anchorage Economic Development Corp. recently began advocating for a local sales tax to help reduce the property tax burden and boost public investment in community projects to increase the city’s quality of life — and to hopefully help keep and attract young families and working-age residents. There’s not yet an official sales tax proposal under consideration by city officials, and any sales tax proposition advanced by city lawmakers would go to Anchorage voters for consideration.

Currently, Anchorage relies largely on property taxes to support municipal government. It has a few local taxes specific to goods and services — including taxes on alcohol, marijuana products and fuel — but it doesn’t have a broad sales tax.

During Monday’s forum, held by the Anchorage Chamber of Commerce, mayoral candidates largely agreed that the city is facing serious economic headwinds, especially outmigration and difficulty attracting and retaining working-age residents.

But the candidates varied widely in their stances on a potential sales tax. Some said it could be a valuable tool to diversify the city’s tax base by drawing on visitors for funds, and bring property tax relief to residents. Others proffered a summertime sales tax would be better or opposed the idea entirely.

Anchorage Mayor Dave Bronson, who is running for a second term, said he could support a seasonal sales tax “if it guaranteed, dollar for dollar, a reduction in property tax.”

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A part-time sales tax appeals to more people because it’s taxing visitors, Bronson said. “But we first have to get our spending under control,” Bronson said.

Candidate Chris Tuck, a former longtime Democratic state lawmaker, has said the city government needs to first improve itself and gain more public trust before seriously pursuing a sales tax.

“It’s going to be hard to ask people to reach back into their pockets when we’re not as efficient as we should be,” Tuck said during Monday’s forum. “We need to be smarter about our investments, we need to be smarter on the returns that we hope to get on those investments.”

But, if the city does pursue a sales tax, it should begin with a seasonal one, he said.

Candidate Bill Popp retired from his 16-year position as chief executive officer of the Anchorage Economic Development Corp. last year, and helped to develop the AEDC sales tax initiative with a group of local organizations and businesses.

“How would you like a 25% reduction on the property taxes on your house? For a 2% sales tax?” Popp asked the audience at the luncheon, adding that a tax could have other benefits.

“A year-round sales tax, with almost 20% of it being paid by people who don’t live in Anchorage, is a tax break for the citizens,” Popp said. “And these are things that we should be having a long conversation about — at least a year’s worth — before we take it to a vote.”

Suzanne LaFrance, former Anchorage Assembly chair and two-term member, has also voiced some support for the idea.

But “taxpayers aren’t getting great bang for their buck right now,” she said Monday. “The first thing we have to do is, do a better job of providing services for the money that taxpayers are paying.”

The city would first need to consider how best to invest in itself, and ultimately, it would be up to the taxpayers to decide, she said.

“It’ll depend on how it’s structured,” LaFrance said. “And as mayor, I’ll look very closely at the any proposals going forward. It might contain a provision to reduce property taxes, but we’ll have to take a close look and make sure that the interests of the municipality and of the residents are taken into consideration.”

The forum also hosted mayoral candidates who have not launched significant campaigns thus far, including Jenny Di Grappa, Phil Isley, Breck Craig and Dustin Darden.

Di Grappa, who is currently the Food Bank of Alaska’s chief of philanthropy and community relations, said that the city should begin with a seasonal sales tax.

“I think we need to ensure that that sales tax is addressing what true challenges and needs that our community has,” Di Grappa said. “At the same time, I would look to some more opportunities for tax breaks and opportunities to support businesses who would support providing critical care, like child care and critical needs like housing.”

Isley, a candidate who describes himself as a nonpartisan alternative to others on the ballot, said he doesn’t support the sales tax idea. The city should live within its limits, he said.

“Our budget right now is over $500 million for the city and the school budget just put in $900 million. With $1.4 billion this year, I don’t think we need more taxes. I think what we need to do is reduce spending, consolidate, look at new ways to do things,” Isley said.

Likewise, Craig also said he opposes a sales tax. Between the city and school district budgets, “it just seems like an astronomical amount of money,” he said.

Craig said the city needs to focus on filling staff vacancies and shoring up its basic services.

There are 10 candidates for mayor in the upcoming April city election.

Ballots are scheduled to be mailed to voters on March 12. The last day to vote is April 2.

If none of the 10 candidates for mayor win at least 45% of the vote, then the top two candidates will head into a runoff election in May. Runoff ballot packages would be mailed May 6 and would be due May 14.