Mayor: Anchorage needs a sales tax to pay for Seward Highway patrols and lower property taxes

Anchorage Mayor Ethan Berkowitz says the city should hold a special election for a new sales tax to reduce property taxes and pay for policing on the Seward Highway, where state troopers have sharply curbed police protection.

A draft version of Berkowitz's proposal, presented to a work session of the Anchorage Assembly on Thursday, would create a 2 percent sales tax.

Officials say such a tax could generate roughly $100 million a year, with about one-fifth of the revenue coming from tourists and non-Anchorage residents. The tax would be collected throughout the entire municipality, from Portage to Eklutna.

Berkowitz told Assembly members his proposal was a far cry from a finished plan and advised them to not focus on details yet.

The draft calls for 15 percent of sales tax revenue to go to "areawide public health and safety," which could include patrols of the Seward Highway along Turnagain Arm, though not in Girdwood, which has a three-year contract with Whittier police.

Alaska State Troopers, which historically patrolled the highway, have largely withdrawn amid deep budget cuts, and said it's up to the city to police the highway south of McHugh Creek. The area, while not an Anchorage Police Department service region, is within the municipality's larger boundaries.

The remaining 85 percent of the sales tax revenue would be dedicated to property tax relief, according to the proposal.


[Read a copy of the proposed sales-tax measure.]

Berkowitz and City Attorney Bill Falsey said the proposal is mainly for discussion: "Don't take anything to the bank just yet," Falsey said. "It's designed to move the conversation forward."

But Berkowitz said the city needs to start looking at ways to buffer itself against the state's economic crisis.

"In these changing times with the state's economy where it is, the budget doing what it's doing, we need to be vigilant in Anchorage to make sure we're able to provide the services we can at the level of quality we're supposed to," Berkowitz told the Assembly.

He said the city should find additional ways to become less reliant on property taxes.

No date has been proposed for a special election, and there were mixed reactions from Assembly members at the work session. During Thursday's meeting, Assembly members started to talk about changes to the sales tax proposal.

The draft of Berkowitz's proposal would require approval of a simple majority vote of Anchorage residents, rather than the 60 percent supermajority required in city charter. Falsey said officials had determined a 60 percent vote would be "insurmountable" when it comes to a sales tax, and the proposal contains a charter amendment to allow a simple majority to approve it.

Assemblyman Bill Evans had introduced a sales tax proposal that would entirely dedicate revenues to reducing property taxes. The Assembly was due to hold a hearing on Evans' measure at its meeting next week.

But Evans said Thursday, while he preferred some parts of his original proposal, he was comfortable substituting Berkowitz's version for his own.

Assembly Chair Elvi Gray-Jackson said she would open the public hearing on Evans' measure next week, then delay it until the Berkowitz administration's proposal was ready to be formally introduced, though it wasn't known Thursday when that would be.

Devin Kelly

Devin Kelly was an ADN staff reporter.