​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Project Anchorage Sales Tax Proposal

AO 2024-105

(SA)

(S-1)

(S-2A)

(S-3)

(S-4)

​​​The Original Proposal - AO 2024-105

Assembly Members Randy Sulte and Felix Rivera introduced AO 2024-105 on October 22, 2024 to initiate the public process.​​ 

Read AO 2024-105   Read the Memo

​The Sponsors' Substitute - AO 2024-105 (SA)

As sponsors of Project Anchorage, Assembly Members Randy Sulte and Felix Rivera proposed their​ substitute (S) version with the following changes from the original proposal: 

• Adds 11 Municipal Area Projects (MAPS) to the ballot proposition:
  
  1. Public Safety Vehicle Fleet - replace vehicles to improve public safety response capabilities.
  2. Snow Plowing and Removal Heavy Equipment Fleet - improve snow plowing by replacing aging equipment.
     
  3. Kincaid Trailside Facilit​y –  full-service indoor facility with space for year-round recreation amenities like food and beverage concessions, outdoor gear rentals, and gathering space.
  4. Goose Lake Trailside Facility – replacement of existing structure with full-service indoor facility with space for year-round recreation amenities like food and beverage concessions, outdoor gear rentals, and gathering space.
     
  5. Westchester Lagoon Trailside Facility -  full-service indoor facility with space for year-round recreation amenities like food and beverage concessions, outdoor gear rentals, and gathering space.
  6. Downtown Arts and Entertainment Redevelopment – upgrade the Performing Arts Center and improve downtown core pedestrian experience with lighting, wayfinding, walkways, and other pedestrian infrastructure.
  7. East Anchorage Sports Center – indoor sports center including an indoor track, open turf space, court space, and other features.
  8. Anchorage Children's Museum – a facility offering exhibits and programs designed for children.
  9. Chester Creek Sports Complex Redevelopment – a sports facility offering indoor space and other amenities complementing the area's revitalization.
     
  10. Eagle River Sports Center – indoor sports center including a track, open turf space, court space, and other features for sporting activities.
  11. Girdwood Arts & Recreation District – a community space for art, special events, and an RV park.
      
• Adds nonprofit and regional housing authority purchases and educator expenses to the list of tax exemptions.
  
• Excludes alcohol, marijuana, and tobacco purchases from the exemption for low-income households.
  
• Adopts the Alaska Uniform Remote Sellers Sales Tax Code by reference.
  

On February 7, the sponsors published their draft SA version​ to replace the S version with changes drawing from the January Special Sales Tax Committee meeting​ and amendments​ proposed by various Assembly members​. ​Read their statement. 

Read AO 2024-105(SA)  Read the Memo

WITHDRAWN Chair Constant's Substitute - AO 2024-105 (S-1)

Assembly Chair Christopher Constant proposed a substitute (S-1) version​ of the ordinance which would change the ballot proposition from a charter amendment to an advisory vote on the idea of the tax.​​ As of January 8, Chair Constant has withdrawn his proposal from consideration. 

Read AO 2024-105(S-1)   Read the Memo

WITHDRAWN Vice Chair Zaletel & Member Volland's Substitute - AO 2024-105 (S-2A)

Assembly Members Daniel Volland and Meg Zaletel proposed a substitute (S-2A) version of the ordinance which would restructure the distribution of revenue from the 3% tax into four quarters dedicated in equal parts to the following: 

• Property tax reduction (under the tax cap)​​
  
• Up to seven Municipal Area Projects (MAPS)
• General government funding dedicated to public services including public safety, snow fleet replacement and affordable housing and public transit development (outside the tax cap)
  
• General government funding secured in a trust and prioritized for improving municipal facilities, expanding existing benefits and addressing identified community needs not otherwise adequately funded (outside the tax cap)
  

This proposal would also provide an exemption for households earning 80% or less of the median Anchorage income (determined by HUD) and​ increase the municipal tax exemption for business personal property to $250,000. ​​

The S-2A version replaces the S-2 version with changes that call for a special election to consider the proposed ballot prop, as opposed to submitting the question to the voters as part of the regular election in April. Additionally, it clarifies the processes by which the Assembly will submit ballot propositions to the voters every seven years to approve future MAPs projects and to approve purposes for the expenditure from revenues from the dedicated fund. Finally, the S-2 cleans up several drafting errors in the original S-2. As of January 30, Members Volland and Zaletel have withdrawn their proposal from consideration. ​

​​Sponsors' Statement

With hope that our community takes the time this effort deserves, we have decided to withdraw our sales tax alternative from further consideration.

Project Anchorage is sparking a worthwhile conversation about how the Municipality captures and dedicates revenue to meet the needs of our community. The Assembly’s role is to craft a ballot proposition with confidence that, if approved by voters, the system could work. 

We appreciated the opportunity to meet in a Special Sales Tax Committee meeting earlier this month. This allowed us to work alongside the original Project Anchorage sponsors and raise ideas and concerns, in an effort to find common ground and identify components of the proposal that require additional information to make an informed decision. We look forward to seeing if those ideas and concerns are addressed in any subsequent versions that may be brought forward by the sponsors of the S version.

The Assembly must consider how we make targeted quality-of-life investments in our city, while also acknowledging that many families are struggling to afford to live here. At the core of our alternative, we sought to mitigate the regressivity of a sales tax proposal. Any future proposal should have the same goal.

Read AO 202​4-105(S-2A)   Read the Memo     ​Review Proposed Amendments​​​

​​​WITHDRAWN Member Martinez's Substitute - AO 2024-105​ (S-3)

Assembly Member George Matinez proposed a substitut​e (S-3) version of the ordinance which would reduce the sales tax from 3% to 1.5% and restructure the dedication as​ follows: 

• Eliminates the proposed property tax offset
  
• 1% for Municipal Area Projects (MAPs)
  
• 0.5%​ for administration of the tax and other public purposes (outside the tax cap)​
  

As of January 13, Assembly Member Martinez has withdrawn his proposal from consideration.

​​Sponsor's Statement
In response to community concerns about fairness, fiscal responsibility, and Anchorage’s deteriorating core infrastructure, this alternative reduces the sales tax burden, prioritizes fiscal accountability, and focuses on practical, immediate investments in foundational infrastructure to ensure a livable and functional city.​ 
​

Read AO 2024-105(S-3)   Read the Memo

​​​WITHDRAWN Member Brawley's Substitute - AO 2024-105​ (S-4)

Assembly Member Anna Brawley​ proposed a substitut​e (S-4) version​ of the ordinance which would restructure the dedication of the 3% sales tax as follows: 

• Eliminates the Municipal Area Projects (MAPs) dedication
• 2.5% to specific uses approved by voters (outside the tax cap)
• 0.5% to property tax relief (under the tax cap)

This version would also change the structure of the tax as follows: 

• Removes the 7-year expiration for the tax and makes the tax permanent
  
• Allows using the fund for debt related to capital projects
  
• Exempts alcohol and marijuana sales and calls for other exemptions to be addressed by ordinance
• Removes the proposed transaction cap. 
  

The proposal also increases the municipal tax exemption for business personal property to $100,000 and calls for a special election in September 2025 for the ballot proposition. As of February 4, Assembly Member Brawley has withdrawn her proposal from consideration.​

​

​​​Sponsor's Statement​

​This substitute version proposes a significantly different approach to the sponsors’ Project Anchorage proposal (AO 2024-105(S)), but also carries forward broad goals from their concept:

• Anchorage must invest in itself to revitalize our city, which should include public amenities
• Projects we build need maintenance and operations costs built in, to be sustainable long term
• Voters expect balanced trade-offs when approving a new revenue source, since residents ultimately will pay most of this new tax

This version prioritizes dedicated funding in a 5 to 1 ratio with property tax relief, towards a list of community needs for capital investments and increased services. This list is designed to address known needs that do not already have adequate funding streams, or will not be built by the private market alone. Each category could be implemented in a variety of ways, with ideas for each listed in the memo (AM).

• Funding for affordable housing constr​uction and repair
• Programs to support small business
• Expanded public transit service
• Capital funding for upgrades to existing facilities and building new public facilities, plus improvements to increase access to these facilities, and ongoing maintenance and operational costs.​

Read AO 2024-105(S-4)   Read the Memo

​

Background

AEDC and a coalition of local business leaders began developing the Project Anchorage proposal in early 2023, taking inspiration from Oklahoma City’s sales tax model which dedicates funds to quality-of-life improvements​.​

Public Process​

Enacting a sales tax requires amending Anchorage Municipal Charter, which can only be done on the ballot. There are multiple ways to get a proposition on the ballot, one being through Assembly action. 

​Public Testimony An ordinance containing the proposed ballot proposition language is introduced and set for at least one public hearing. The Assembly can continue the public hearing to future meetings.  The public is invited to weigh in during the hearing. Learn more about providing public testimony.

​Assembly Action The Assembly's legislative process may include committee hearings, worksessions and postponement until an ordinance is ready for action.  The Assembly will take action after the public hearing is closed. A ballot proposition ordinance must be approved by at least 8 members, or 2/3 majority, to be placed on the ball​ot.​​

​Majority Vote If the Assembly approves the ordinance no later than 70 days before Regular Municipal Election Day​, the ballot proposition will appear on the ballot. ​​ A ballot proposition can be approved by a simple majority of voters.​​

Legislative History​

• March 4, 2025 –​ Public Hearing
  The next public hearing on Project Anchorage will be held at the Regular Assembly Meeting on March 4. The sponsors have expressed their intent to continue the public hearing to March 18 and hold two town halls in advance to collect community feedback. ​
  
• February 28, 2025 – Final Worksession
  The sponsors review their SA Version with members at the next - and final - Assembly Worksession on this item. 
  
• February 7, 2025 – Sponsors' Draft Compromise Version Introduced​
  Following the January Special Sales Tax Committee meeting​, the sponsors published their draft SA version​ to replace the S version with changes drawing from community input, alternative proposals, and amendments​ proposed by various Assembly members​. ​Read their statement.
  
• January 17, 2025 –​ Special Committee Meeting​​​​​
  During the January Rules Committee Meeting, Assembly Chair Constant announced the creation of a special committee for AO 2024-105​ to discuss ideas for consolidating some elements of substitute (S) versions. Find committee meeting materials on the special committee webpage.​
  
• January 7, 2025 –​ Public Hearing 
  During the January 7 Regular Assembly Meeting, the Assembly voted (7-5) to approve AR ​​​​​2025​-17​​, expressing intent to hold a special election before ​November 30, 2025 for the Project Anchorage sales tax question, should the Assembly approve sending it to voters. Members then voted to continue the public hearing to the Regular Assembly Meeting on March 4. 
  
• December 17, 2024 – Substitute Versions Introduced
  During the December 17 Regular Assembly Meeting, multiple substitute (S) versions are introduced by several Assembly Members, reflecting a range of feedback from the public process:
  
• 2024-105 (S) - Sponsors' Substitute Version, Assembly Members Randy Sulte & Felix Rivera
  
• 2024-105 (S-1) - Assembly Chair Christopher Constant
  
• 2024-105 ​​​(S-2) - Assembly Vice Chair Meg Zaletel & Member Daniel Volland
  
• 2024-105 (S-3) - Assembly Member Martinez
  
• 2024-105 (S-4) - Assembly Member Brawley​
  
• December 6, 2024 – Community Concerns Worksession
  Community organizations, including the Anchorage Community Land Trust and the Alaska Black Caucus, present their concerns and recommendations​. ​
• December 6, 2024 – Substitute Version and Amendments Worksession
  The sponsors present their draft substitute (S) version and members share their ideas for other S versions and/or​ amendments:
  
• ​Assembly Vice Chair Zaletel - ideas and scenarios
  
• November 14, 2024 – Project Selection Wor​ksession​
  Assembly Members Randy Sulte and Felix Rivera welcome AEDC staff to review the process for soliciting and selecting capital projects​ included in the proposal.
  
• November 6, 2024 – Public H​earing​
  The public hearing on AO 2024-105 opened at the November 6 Regular Assembly Meeting. Members voted to continue the public hearing to the Regular Assembly Meeting on December 3. 
  
• October 22, 2024 – Introduced Ordinance​
  Assembly Members Randy Sulte and Felix Rivera formally introduce AO 2024-105 and set a public hearing on November 6, 2024.
• October 10, 2024 – Draft Ordinance Worksession
  Assembly Members Randy Sulte and Felix Rivera present a draft of the ordinance to the Assembly during a worksession, alongside a ​Summary of Economic Effects (SEE)​.
• August 16, 2024 – Worksession
  AEDC President Jenna Wright gives a high-level presentation to the Anchorage Assembly at a worksession. ​
  
• December 15, 2023 –​​ Project Anchorage Kickoff Meeting
  Formalizing the work of an ad-hoc AEDC committee that began meeting in Summer 2023, the Project Anchorage team meets to roll out the proposal to the public and solicit capital project ideas. The Project Anchorage team continues meeting twice a month through the process. 
  
• 2015 - 2022 – AEDC Visits Oklahoma City
  Over several years, AEDC organizes three delegations to Oklahoma City to glean insights from the city's "economic renaissance," which has been heralded as an example of how cities across the United States can engage their communities in revitalization efforts. After two inspiring visits in groups of 10-15, AEDC leads a group of 25 Anchorage locals to Oklahoma City in September 2022, igniting the work of Project Anchorage to develop a transformative proposal.
  

FAQs

What does Project Anchorage propose?

Project Anchorage proposes a temporary 3% sales tax in Anchorage, aimed at reducing property taxes and funding capital projects. Of the revenue generated, two-thirds would be used for property tax relief. The remaining one-third would be dedicated to public projects, intended to improve the quality of life in Anchorage.

Why is Project Anchorage in front of the Assembly?

Enacting a sales tax requires amending Anchorage Municipal Charter, which can only be done by majority vote of Anchorage voters. Before the question goes on a municipal election ballot, the Assembly must first approve, with at least 8 members in support, an ordinance to submit the ballot language to qualified, registered voters. 

Where can I learn more about Project Anchorage?

The Project Anchorage website offers more details about the proposal brought forward by business leaders, including a report​ which details estimated revenue and impacts. ​

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