Anchorage Assembly’s rain of taxes postponed to January meeting

The Anchorage Assembly spent much of its Tuesday night meeting wrestling with multiple tax proposals, with several measures failing or being pushed to a later date as debate stretched late into the evening.

Assemblyman George Martinez withdrew and indefinitely tabled his proposed 1% sales tax, known as “Pennies for Progress,” which would have gone before voters in April, if passed. Martinez said he did not want his proposal to interfere with Mayor Suzanne LaFrance’s separate push for a 3% sales tax and characterized the withdrawal as a way to avoid confusing voters with competing sales tax measures on the same ballot.

The Assembly also took up a proposed short-term rental tax. Assemblyman Daniel Volland successfully offered an amendment to exempt owner-occupied properties, meaning the tax would have applied only to investment properties. Shared living spaces, such as owner-occupied homes with short-term rentals, would not have been taxed under the amendment. While the amendment passed, the underlying ordinance failed.

Another amendment, offered by Assemblyman Zac Johnson, sought to ensure that revenue generated from a short-term rental tax in Girdwood and Eagle River would stay within those communities rather than being directed to the city’s general funds. Johnson argued that resort-heavy Girdwood and Eagle River should retain locally generated revenue, noting that South Anchorage has limited public transportation despite transit being one of the largest items in the municipal budget. The proposal sparked extended debate, including a back-and-forth between Assembly Members Keith McCormick and Felix Rivera, with Rivera arguing that funds should be centralized to address citywide needs. The measure ultimately failed on an 8–4 vote.

While the tax itself did not pass, the Assembly did approve an ordinance requiring the registration of short-term rentals. Beginning May 1, all short-term rental units, including Airbnbs, will be required to register with the municipality. The registration will carry no fee.

Two additional revenue measures – a proposed hotel bed tax and the mayor’s 3% sales tax – were not voted on and were postponed to the Assembly’s Jan. 13 meeting.

In other business, the Assembly approved a new labor contract with the Anchorage Municipal Employees Association, valued at approximately $30 million. During discussion, Assembly members questioned the cost of the agreement, and the administration acknowledged it did not have the total figure readily available at the time, forcing the Assembly to move along on the agenda until the Mayor’s staff could provide a cost estimate.

By the end of the meeting, none of the major tax increases had advanced. At least two are scheduled to return in January.