Treasury sees near-term revenue softness but overall budgets remain largely under control, OMB previews overtime analysis

The Anchorage municipal treasury and Office of Management & Budget briefed the Assembly Budget & Finance Committee on revenue and year-end budget-to-actuals on Thursday, reporting a generally stable baseline but signs of softness in some consumption taxes and several near-term accounting adjustments.

Municipal Treasurer Glenn Cipriano said the municipality monitors about 18 major revenue streams that together total roughly $600 million. He said room tax receipts are tracking close to the 2025 budgeted $45.1 million and that a $16.6 million trust-fund transfer was in the process of being wired into municipal accounts. Cipriano cautioned that some revenue streams are quarterly and will not be final until later in the first quarter.

"If you drop down, I'll just be very brief here with some of the highlights," Cipriano said. He noted tobacco tax collections are down compared with the prior year after a large retailer had overstated taxable sales last year; the adjustment resulted in a $4.2 million reduction to 2025 revenues and an expected stabilized tobacco tax level near $16.5–$17 million. He also said the state reduced alcohol revenue estimates for 2026 and 2027 by roughly 12.55%, and that municipal marijuana receipts also appear softer than anticipated.

OMB Director (Miss) Brous presented the budget-to-actuals through Dec. 31, 2025, and said the roll-up is incomplete but shows overall spending at about 89% for the year with expected adjustment to around 93% once year-end payroll and posting corrections are completed. Labor and nonlabor breakout currently show labor at roughly 95% of budget and nonlabor at about 85%; Brous said some departments' apparent overages reflect misallocated charges that will be corrected through journal entries.

Brous also previewed a deeper overtime (OT) analysis scheduled for the February Budget & Finance Committee meeting. She said the OT analysis will break out historical OT by department, identify whether overtime spending represents a true budget increase or movement within the broader labor allocation, and examine drivers such as vacancies and special operational demands. She said APD and AFD historically have the largest OT budgets and that in some cases departments use funds from vacant funded positions to cover OT costs.

Assembly members asked for follow-up details on APD fine postings, what explains a $200,000 adjustment to APD travel, and how the municipality distinguishes operating labor costs from grant-funded positions. OMB said she would follow up on the APD travel question and that the overtime analysis will include departmental breakdowns and recommendations.