Assembly members reviewed a final work-session draft of the Project Anchorage sales-tax charter change and discussed implementation details, funding priorities and next steps, including asking to continue the public hearing to March 18.

Assembly member Felix Rivera, who led the session, summarized the major revisions to the sponsor-submitted “SA” version, saying the administration and sponsors had lengthened the timeline for initial collection and removed the use tax from the proposal. “Two years is needed for the administration of the sales tax,” Rivera said, and later stated plainly that “the use tax is no longer needed.”

Rivera told colleagues the no-earlier-than date for initial collections was moved from July 1, 2026, to July 1, 2027, with a no-later-than date of Feb. 1, 2028. He also said the draft keeps a proposed 3% sales tax rate and now explicitly includes a business inventory tax exemption carried over from other versions.

Why this matters: sponsors framed the revisions as a response to months of public meetings, community council feedback and legal and economic analysis; they emphasized changes intended to reduce administrative complexity and political friction ahead of a voter referendum. Rivera urged that further implementation details would be addressed in a second round of work if voters send the measure back to the Assembly.

Key changes and discussion

- Use tax removed: Rivera cited the U.S. Supreme Court’s Wayfair decision and work by Alaska’s remote-sellers tax commission as reasons the Assembly “no longer need[s] that use tax” to capture online sales. He also argued neighboring jurisdictions’ sales-tax rates reduce concerns that local businesses could relocate to avoid the tax.

- Start dates and special election timing: Rivera said sponsors proposed shifting the start window. The draft lists a no-earlier-than date of July 1, 2027, and a no-later-than date of Feb. 1, 2028. For special-election timing, Rivera said the sponsors tentatively chose Sept. 2 for a vote-at-home election but that the Assembly could amend that choice; he asked the Assembly to continue the public hearing to the March 18 meeting so town halls can be completed.

- MAPS project list and municipal facilities: The revised MAPS project list retains two housing-focused items — redevelopment at the Chester Creek Sports Complex and the site formerly called the National Archives site — and adds repair and improvements to existing municipal facilities. Rivera said up to 15% of the MAPS allocation (the draft describes that portion as “of the 1% for MAPS”) could be used for existing municipal facilities repairs and improvements.

- Household exemption and inventory exemption: The draft would embed a household exemption mechanism in the charter and carries a business inventory tax exemption language from other versions. Rivera said the household-exemption baseline in the SA draft follows an 80%-of-federal-poverty-level starting point but that particulars would be debated later.

- Transaction cap raised: Sponsors raised the per-transaction cap from $1,000 to $2,500 after comparing neighboring jurisdictions. Rivera said the change is intended to balance concerns about fairness and administrative complexity.

- Alcohol and marijuana: The draft removes alcohol and marijuana from taxable items for seven years and adds a section described as “policy intent” that signals a future Assembly should consider including those items when/if a later tax measure is proposed. Rivera and sponsor Randy Salt said the intent is to give hospitality and marijuana businesses temporary relief; Rivera cautioned that “policy intent” can be changed by future Assemblies.

Implementation, costs and administration

Treasury and administration officials described staffing and enforcement needs. Lauren Crawford, deputy municipal treasurer, said implementing a retail sales tax midstream would require hiring “several dozen” employees and that Treasury’s estimate in the draft is 28 full-time positions to administer the tax at scale. Crawford said those staffing needs would be ramped down if the tax were not renewed, with an estimated eight positions retained to handle collections and audits after sunset.

Crawford and Chief Administrative Officer Bill Ballsy discussed audit risks related to the transaction cap. “Stacking of transactions is one of their biggest audit problems,” Crawford said, explaining that businesses can attempt to split or combine purchases to avoid caps and that technical enforcement and audit rules would be developed in later implementation ordinances.

Financing startup costs: Rivera said the administration proposed initial financing by borrowing from municipal trust funds, to be repaid from sales-tax proceeds if voters approve. Rivera noted adding that loan proposal to the charter-change title means the Assembly cannot adopt the SA version at its next meeting because the public-notice period (seven days) must elapse first.

Project prioritization and oversight

Assembly members asked how projects would be prioritized and who would decide which projects move forward. Rivera said the ordinance envisions an oversight board that would recommend projects; the Assembly would vote on those recommendations. Dean Gates, a municipal staff presenter, emphasized that voter authorization would be an authorization to proceed, not a guarantee of completion. He said projects typically require design, environmental review and engineering and that some items may not be completed even with voter approval.

Public process and next steps

Sponsors told the Assembly they plan to request continuation of the public hearing scheduled for March 4 and to hold at least two town halls before returning for a final public hearing and vote on March 18. Rivera said materials — including a memo, a short summary (“C”), and two economic analyses from the University of Alaska’s Center for Economic Development — are available for members to review.

No formal votes were taken during the work session; sponsors said they will ask the Assembly to continue the public hearing on March 4 and consider the SA draft on March 18.

Ending

After more than an hour of discussion and technical questions from members, sponsors said they plan public outreach and minimal further drafting before the public hearing continuation. Rivera closed by encouraging members to submit proposed amendments and said remaining implementation detail would be handled in a second round should voters approve the measure.