Minnesota daycare scandal serves as warning to Anchorage’s LaFrance daycare sales tax

There is a reason Americans are increasingly skeptical when politicians promise that “this time” more government money will be different. Minnesota offers the latest cautionary tale.

In late December, a citizen journalist’s viral video raised red flags about Minnesota’s Child Care Assistance Program, a federally funded subsidy system meant to help low-income families afford daycare.

The footage showed licensed childcare centers in Minneapolis that appeared empty, abandoned, or barely operational while reportedly receiving millions in public funds. The claims were serious enough that the FBI surged resources to Minnesota, federal agents began door-to-door visits, and national leaders weighed in.

State officials pushed back, saying inspections had not uncovered fraud and that the video may have been misleading. As of now, no new charges have been filed in the latest daycare allegations.

The context matters. Minnesota has a long and documented history of social-services fraud, including the “Feeding Our Future” scandal, the largest Covid-era fraud case in the nation, in which roughly $250 million in federal nutrition funds were stolen and more than 70 people were ultimately charged, mostly Somali-Americans.

And concerns about weaknesses in Minnesota’s childcare subsidy system predate the current controversy by more than a decade. Oversight failures there are not hypothetical; they are a matter of record.

That brings us back home to Anchorage.

Anchorage Mayor Suzanne LaFrance wants voters to approve a new 3% municipal sales tax, possibly as soon as the April ballot. One full percentage point of that tax, roughly a third of the revenue, would be dedicated to childcare and housing programs. Taxpayers would be compelled to fund expanded childcare initiatives through higher prices on nearly everything else.

At the very moment when Minnesota’s model of childcare funding and oversight is under national scrutiny, Anchorage is being asked to sign a blank check.

The mayor’s proposal slices the sales tax into three parts: A third for property tax relief, a third for public safety and infrastructure, and a third for childcare and “early learning.” The sales pitch is familiar: economic growth, workforce participation, family-friendly policy. There is no enforceable plan for oversight, accountability, and long-term administration.

No one disputes that childcare is expensive or that families struggle with it. Yet good intentions are not a substitute for safeguards. Minnesota’s experience shows how quickly Democrat subsidy programs can spiral into systemic abuse, especially when state and local governments are eager to expand spending faster than they are willing to enforce rules.

A survey of the State of Alaska’s child care database shows that most of the home child care services are located in the Fairview, Russian Jack, and Muldoon areas of Anchorage, and that they are licensed by the municipality. Those who serve fewer than eight children are poorly regulated and my scouting of the operators leaves me with many questions.

There is also the matter of cost. Sales taxes are not free to administer. In cities across the country, it can cost up to 5% of total collections just to run a sales tax. Anchorage is not Seattle or Los Angeles; it lacks the economies of scale of major metropolitan governments. A conservative estimate would put administrative costs at no less than $7.5 million per year, money that will never reach police officers, potholes, property tax relief, or childcare providers. It will be consumed by a bulging bureaucracy.

Anchorage already has dedicated funding for early education and childcare through marijuana tax revenues approved by voters in 2023. Now residents are being asked to pile on another layer, permanent and far broader, at a time when faith in government stewardship is wearing thin.

This debate cannot be separated from what is happening in Minnesota. That state is governed by Democrats. Anchorage is governed by Democrats. Mayor LaFrance is supported by the Democratic Party.

Minnesota Governor Tim Walz was Kamala Harris’ running mate. Had the election gone differently, the same governing philosophy now under scrutiny in Minnesota would be shaping federal policy nationwide. Anchorage Mayor Suzanne LaFrance is exhibiting the behavior of someone who has plans for higher office. And Alaska Democrats have fallen for this stuff before.

In Alaska, 140,026 voters cast ballots for the Harris-Walz ticket. Another 153,778 voted for Joe Biden in 2020. In 2016, Alaska Democrats rallied behind Bernie Sanders rather than Hillary Clinton. These choices reflect a pattern of socialist leanings and bigger government, even when evidence shows those solutions often fail the people they are supposed to help.

Meanwhile, 184,458 Alaskans voted for Donald Trump and JD Vance. Within days of taking office, Trump issued executive actions tailored specifically to Alaska, reopening doors on energy, land access, and economic development that had been slammed shut. The contrast could not be clearer.

Can anyone seriously argue Alaska would be better off under a Harris-Walz administration? Or that Anchorage will be safer, more affordable, and more accountable by adopting LaFrance’s spending-first, oversight-later approach? The one that looks so familiar to what’s being blown wide open in Minnesota?

Anchorage voters should be asking hard questions now, not after the money is gone. How will funds be tracked? Who audits the programs? Do you trust the LaFrance Administration or any that may follow hers? After all, Ethan Berkowitz was mayor not that long ago.

And how much trust should residents place in a political class that keeps insisting, despite mounting evidence, that more money will fix problems created by poor governance?

Minnesota is a warning. Anchorage voters, are you paying attention?

Suzanne Downing is founder and editor of The Alaska Story.