Anchorage Mayor Suzanne LaFrance unveiled a proposed $656.9 million operating budget for 2026 on October 2, emphasizing fiscal restraint while prioritizing public safety and addressing homelessness amid warnings of a looming “fiscal cliff.” The plan, largely flat compared to 2025, stays $175,000 under the property tax cap, avoiding a mill rate increase despite pressures from inflation, population stagnation, and declining state funding. Property taxes remain the dominant revenue source at over 62%, totaling about $391 million, with other key streams including room taxes ($44 million) and tobacco taxes ($21 million).
Public safety dominates expenditures, with the Anchorage Police Department allocated $151.3 million (22.7% of direct costs) and the Fire Department $132 million (19.8%). A significant focus is homelessness, with nearly $27 million embedded across departments—$10.4 million for Health Department shelters, outreach, and mental health contracts; $4.6 million for non-congregate winter shelters; and additional funds for police encampment response ($4 million), fire crisis teams ($4.4 million), and parks cleanup ($822,000). This equates to roughly 4.1% of the budget, aiming to provide year-round support and camp abatement.
Diversity, equity, and inclusion (DEI) initiatives receive $2.1 million municipality-wide, including $431,000 for the Equity & Inclusion Department to handle data, training, and community forums; $771,000 for the Equal Rights Commission; and embedded costs in human resources ($275,000) and police bias training ($300,000). Per household, this represents about $19 annually based on median property taxes of $3,555.
Residents may see no direct tax hike, but rising home values could drive up property tax to bills for average households. The budget projects a $61 million cumulative deficit by 2031 without new revenues, potentially leading to service cuts.
“We narrowly avoided cuts and service reductions in the 2026 budget proposal,” Mayor LaFrance said in a press briefing.
