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Thursday, March 21, 2019
HomePolitics and PolicyAnchorage voters to decide: 5 percent tax on alcohol?

Anchorage voters to decide: 5 percent tax on alcohol?

PROPOSITION 9 WOULD REQUIRE A 50+1 MAJORITY

The ballots are in the mail, and before April 2, Anchorage voters will be deciding whether to levy a 5 percent tax on their drinking habits. The mayor says the $11 million to $15 million he’ll raise with this tax will be used to pay for homeless services.

Proposition 9 states the alcohol tax would be used for health and public safety uses. After the city pays itself for the cost of administration, collection, and auditing, the remainder of the tax would go toward alcohol and substance misuse prevention and treatment, community behavioral health programs, public safety, and homelessness prevention and response, including cleaning up homeless campsites.

Alaska has the highest alcohol tax in the nation, at $12.80 cents per gallon, a result of a tax imposed by the Legislature in 2002, when lawmakers, led by then-House Rep. Lisa Murkowski, sought to abate alcoholism in the state by doubling the tax on hard liquor and tripling the tax on wine. Beer tax went up too, but not as much.

The effort didn’t slow down drinking in Alaska, which increased dramatically in the years after the tax: Hard liquor sales skyrocketed by over 40 percent and wine sales went up 56 percent. The tax is levied at the wholesale level, and is incorporated into the cost of the product consumers buy.

Now, Anchorage Mayor Ethan Berkowitz wants to add another tax, this one to pay for social services for the homeless: Shelters, substance abuse treatment, he cites as examples. But the language of the proposition is broad — any public safety or health issue could qualify to tap into the tax revenues. For example, pay increases for muni police and fire personnel would be considered a public safety expenditure.

HOW WILL THIS AFFECT YOU

If you buy alcohol either at a bar or a liquor store, you’ll end up paying more. A $25 bottle of wine will cost you $1.25 more, on top of the 66 cents per liter you pay to the State for its excise tax.

A $60 bottle of gin has a state tax of between $2.50 (for 750 ml) and $3.38 (liter). You’ll pay another $3 to Anchorage to help the homeless.

Drink at a bar? That’ll be 50 cents more for a $10 cocktail. Dinner out? Add on 45 cents more for a $9 glass of wine.

Normally, taxes in Anchorage must be passed by three-fifths of the voters. But Proposition 9 asks voters to also bypass the charter and approve this tax on a simple 50+1 majority.

Juneau has a 3 percent sales tax on liquor, which is added to the 5 percent local sales tax, for a total of 8 percent. The City of Fairbanks levies a 5 percent sales tax on alcoholic beverages.

WHY DIDN’T THE STATE BOOZE TAX END CHRONIC ALCOHOL ABUSE?

With Rep. Murkowski leading the charge for the state alcohol tax in 2002, she and other tax advocates said the money would be dedicated for alcohol and drug abuse programs. But even while the state collected hundreds of millions of dollars in revenue, it spent less and less on these programs. The Alaska Constitution doesn’t allow tax revenues to be dedicated to special uses, but generally 50 percent of the alcohol tax collected goes for treatment of alcohol abuse, far less than the apparent need.

In 2003, the State of Alaska alcohol tax brought in $10 million in revenue. By 2018, the state collected $39.2 million from alcohol sales.

Mayor Berkowitz plans to collect another $11-15 million starting in January, 2020.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • By the time the first batch of tax money rolls into Berky’s Office — it just might be redirected to some other worthy liberal cause.

    If Berky REALYY WANTS NEW REVENUE SOURCES — cut 15% out of MOA budget 2019 and 2020
    This is just another liberal ploy.with the booze tax.

  • It is wrong to fine (that’s what is happening with this tax) responsible users of a legal product that aren’t causing a problem. Explain to me why if I have a glass of wine with dinner or a beer watching the game why I should be fined if my responsible use of a legal product doesn’t generate the response of city services. Target the abuser/people who break the law & generate a response of city services with a fine (with a ramped up scale for repeat offenders) that cannot be plea bargained away. This approach will not eliminate the problem of addiction but it will go a long way towards introducing some personal responsibility (holding one accountable for their actions) that is absent in the present approach of “just tax it more”.

  • For a mere $15M the Anchorage Assembly of Social Engineers can clean up the bums, an enviable goal that continues to elude their counterparts in Seattle, Portland, and San Francisco?
    .
    Or is the issue more about the predictable manipulation of a mail-in balloting system forced on voters so no law or tax gets left behind?
    .
    Either way, it’s a good thing nobody: (a) takes the “voting” part seriously anymore especially after the Great Alaska LeDoux Vote Experiment, (b) believes the Berkowitz Bum Tax will do anything except make more bums,
    .
    or (c) is surprised that giving housing to bums means giving mailing addresses to bums which means bums just became potential voters, who for a jug or two of the right stuff gifted by their new best friends, can be helped by said friends to vote by mail for just about anybody or anything.
    .
    An epic social-engineering disaster in the making, but will be fun to watch…

  • Seems appropriate as one of the few items purchased by homeless folks is booze and booze is usually half the reason that they are homeless to begin with.

  • Alaska – The Americas last Taxer!

  • Make alcohol pay for the problems it creates instead of tax payers. Don’t care how much they have to tax it. Alcohol is scourge on society, it should be high, it should be expensive.

    • Do you drink alcohol?

      • Never drank a drop in my life, yet I am paying to clean up after the industry through property taxes. I don’t care how much you tax it as long as it covers the cost of the problems it creates. Not likely to happen in my life time as city governments are easily corrupted.

  • Prove previous and current tax revenue is being spent the way it was voted for.

  • So like what happened to the Tax Cap or the 60%+1 vote necessary to raise it?

    Not only does this proposition raise alcohol taxes, but in order to do so, simultaneously removes the 60%+1 voting requirement to raise the tax cap. This is sort of like what the Assembly did in 2006 when it simultaneously had an ordinance changing the runoff from 50%+1 to 45%+1. He ended up being a mere 11 votes over that limit or would have had to face George Wuresch in a runoff (Mystrom was the spoiler in that race, splitting the vote nicely). When a trick works once, why not do it again? Cheers –

  • Please, Please, Please Mayor Berkowitz, raise another tax! Your property tax increase and your 10 cents per gallon gas tax really made my bottom line improve last year. Please, keep up the good work so more people who can’t (or won’t) afford to live in Anchorage move out to the Valley. In 2018 over 1,200 Anchorage residents moved out here. We love relocating Alaskans!

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