Anchorage budget office says revenues roughly on target as some tax streams fall short

Deputy Treasurer Lauren Crawford said the municipality's revenues are "within 1% and and over 1% actually where we should be for the year," while flagging that tobacco receipts are coming in below expectations and that alcohol and marijuana tax receipts may be as much as about 10% below the original budget projections.

The Office of Management and Budget director, Ona Brause, told the committee the municipality is generally underspent: year-to-date reports showed roughly a 6% underspend in some rollups with an overall forecast to end the year about 2'% to 3% under budget. Brause said labor spending is at about 90% of budget and non-labor is about 10% underspent, and that staff will reconcile year-end transfers and invoices before finalizing rollovers.

Why it matters: the near-term revenue shortfalls in tobacco, alcohol and marijuana funds affect specific program appropriations and grant spending timelines; at the same time, overall underspending gives the municipality room to absorb some of the shortfalls but will be subject to first-quarter adjustments.

Details and next steps

Crawford attributed lower alcohol receipts in part to national declines in alcohol consumption and said the marijuana market has shown signs of saturation and price competition, reducing price-based tax receipts. Brause said staff will "go through and verify that all required transfers and fund payments have been made" before rolling funds forward and will include any required adjustments in the first-quarter budget process.

OMB also flagged several specific items the committee will monitor in Q1: an overtime analysis to examine true overtime patterns (especially in first-responder departments that historically run higher overtime), verification of coding where small overtime charges appear in departments with no overtime budget, and year-end rollovers for uncompleted capital projects and purchase orders.

On program spending tied to specific funds, Brause said alcohol-tax appropriations have mostly been distributed and are underspent for 2025; marijuana appropriations were front-loaded in 2025 because two years of funding were put on the books after a 2024 fund transfer to the ACE fund, so the 2025 budget appears larger than the ongoing annualized level (staff said the regular annual level will be nearer $5.5 million).

The committee also asked about the Boys and Girls Club Mountain View operations after recent news reports. A member asked if the organization was "going out"; Brause said the municipality took over the Mountain View Club last year and the municipal appropriation (about $145,000) supports local municipal operations, while a separate $400,000 appropriation is intended to reduce membership fees citywide. She said she would check whether any appropriated funds would be recoverable if private operations cease.

The committee directed staff to present the overtime analysis and bring any recommended first-quarter budget revisions back to the committee early in the year.