Although Mayor-elect Suzanne LaFrance has not taken office yet, the rollout of a new proposed sales tax for Anchorage was already ready to go, and the website is up and running.

The Anchorage Economic Development Corporation has launched Project Anchorage, to get a 3% sales tax in place — because city government doesn’t have enough to work with.

The idea is to start taxing sales of goods at 3%, but that could and likely will increase over time.

The promise being made by the group is that the new tax will reduce property taxes, which are higher than they would be because of the large number of property tax exemptions that have been given out by the city, shifting the tax burden to homeowners.

“Led by the Anchorage Economic Development Corporation (AEDC), we have met since the summer of 2023 to develop a proposal that would implement a temporary 3% sales tax to reduce property taxes, and invest in quality of life enhancing capital projects,” the Project Anchorage group says.

It also says it is copying Oklahoma City. That’s a city where former Democrat Mayor Ethan Berkowitz paid a visit during his term in office to get ideas about good governance.

“Our proposal takes inspiration from Oklahoma City, which used a similar initiative to successfully reverse years of economic decline, beginning in the 1990s. After implementing a 1% sales tax to fund dozens of projects such as a new canal and waterfront entertainment district, sports stadium, downtown library, and convention center – not only did voters reauthorize the sales tax multiple times since the program began, but Oklahoma City has seen incredible population and economic growth as a result of this public investment,” AEDC says.

But while the Oklahoma City sales tax started at 1%, it’s now at 4.13%, and combined with the state sales tax, it’s over 8.6%. This is something Project Anchorage doesn’t reveal in its literature.

The group plans to get the question on the April 2025 ballot. It has many supporters on the Assembly and with the incoming mayor.

Unlike Oklahoma City’s starter sales tax of 1%, the Anchorage proposal would start with a 3% sales tax, set to sunset after 5 years. In reality, the municipality would return to voters for reauthorization of the tax and make it hard to say no.

As currently proposed by the group, this new tax will reduce property taxes and use some of the money to make Anchorage “a more attractive place to live and visit.”

• “Projects would be sourced from an extensive public input process, and selected before the initiative is taken to voters for a final decision,” the group promises. In addition, of course, voters would be asked to pass more bonds.

Food, childcare, medical expenses, gasoline, and banking services would be exempt from the tax, which would also apply to just the first $1,000 of any eligible purchase.

The Anchorage Economic Development Corporation is often criticized by conservatives for having produced nothing of value in the past few years, under the direction of recently resigned Bill Popp. Popp brought in no business to speak of but held an annual luncheon to describe the poor economy to the business leaders of the city. Now, with its new leader, Jenna Wright, the mission is no longer just providing reports on the economy, but taxing the public.

It’s a far cry from the early days of AEDC, when it helped bring in a cargo hub economy for the airport and made it possible for the Alyeska Resort to become a destination, by helping to facilitate a major hotel project. But that was decades ago.

“Remember, that the AEDC organization was run by Bill Popp who claims to be ‘non-partisan,'” explained Bob Baer on the NextDoor website. Popp unsuccessfully ran for mayor, peeling off business votes from incumbent Mayor Dave Bronson. “Keep an eye on him. I suspect that behind the scene, this 3% tax has been proposed by Mr. Popp, in conjunction with Project Anchorage, and the new director of the AEDC. They indicate that a portion of the sales tax, and future increases in the sales tax revenues, will be applied to a reduction to real estate property taxes, and the balance would be used to build or improve ‘public amenities.’ If the sales tax were to be included in the tax cap, that might be a good thing, as long as real estate taxes were reduced accordingly.”

During his tenure at AEDC, Popp pushed hard for tax exemptions on certain commercial and residential properties, both downtown and in other areas of Anchorage. When large property tax exemptions are allowed, the amount of the exempt taxes are indirectly paid by the remaining taxpayers, says Baer, who is a real estate broker. Thus, after exempting so many properties in town from the property tax, the city now wants to make up for that by enacting a sales tax.

“If the sales tax is approved at 3%, it will surely go higher,” Baer points out.

While the Project Anchorage group has major support from business players like the Anchorage Chamber of Commerce, Visit Anchorage, the Calista Corp., and Anchorage Downtown Partnership, there is no similar group that has been established to oppose the tax increase.