Anchorage Doesn’t Need a New Tax -- It Needs to Properly Use the Money We Already Have
by chelsea foster
Anchorage already has revenue streams it has not fully used - especially from the cannabis industry.
Anchorage voters are being asked to approve a new 3% city sales tax. Before we add another tax on people who are already struggling, we need to honestly assess how the city is using the revenue it already collects. Many families in Anchorage are dealing with rising costs for food, heating, rent, and basic services. Adding a new tax right now does not feel responsible.
The administration says this tax could bring in $148 to $176 million each year. They say it would support property-tax relief, public safety and infrastructure, and programs for housing and childcare. These ideas sound helpful, but Anchorage already has revenue streams it has not fully used - especially from the cannabis industry.
Anchorage has more cannabis stores than many other Alaska communities, yet it collects about the same amount of cannabis tax revenue. This is not because demand is low. It is because Anchorage blocks on-site cannabis use and drive-through service, even though the State of Alaska allows both under strict rules. Other cities adopted these tools years ago. Anchorage chose not to. Every time the city blocks legal and regulated access, it reduces cannabis sales - and that directly limits the cannabis tax revenue that funds Anchorage’s Early Childhood Education Fund. If we want stronger, more stable revenue, we should support industries that already exist and contribute.
Anchorage also treats industries differently. A private cigar lounge is allowed to offer indoor smoking inside a building that shares space with other businesses - and it does so without generating any municipal tax revenue. Meanwhile, cannabis businesses, which must follow stricter state ventilation and safety rules, are not allowed to offer on-site use at all, even though their sales help fund voter-approved programs. This difference is not based on health or safety. It reflects outdated attitudes and political choices that block legal revenue opportunities while allowing untaxed indoor smoking elsewhere in the city.
The sales tax also comes with large startup costs. The city plans to borrow millions from the Municipal Trust Fund to set up the tax system. That loan would be repaid with the sales tax itself, meaning the first dollars residents pay will not support services. They will pay to build the tax structure.
The Institute of Social and Economic Research (ISER) at UAA reviewed this proposal and found that a sales tax would place the biggest burden on low-income households. Even with exemptions for housing, medicine, groceries, childcare services, utilities, and fuel, a sales tax is still regressive. Families with lower incomes spend a larger share of their income on essential items, so the impact on them is greater. Homeowners might see some property tax relief, but most renters will not.
The Assembly cannot raise the 3% sales tax without voter approval. But once a tax system exists, future leaders can return with new ballot measures asking to change how the money is used. Anchorage has shifted “dedicated” revenue before, so residents have valid concerns about long-term promises.
Anchorage does not need a new tax. It needs leadership that uses existing revenue responsibly, supports legal industries that already contribute, and avoids adding more pressure on families who are already struggling. Voters should say no to the 3% sales tax and yes to more accountable leadership.
Chelsea Foster is a local business owner and long-time cannabis policy advocate in Alaska. She is the founder of the Cannabis Consumers Organization of Alaska and spent nearly a decade with the Alaska Marijuana Industry Association, contributing to the industry’s development since its inception.
