Anchorage reports first revenue from new alcohol tax

ANCHORAGE, Alaska (KTUU) - Most Anchorage residents didn’t get out much during the pandemic, but now that some are returning to bars and restaurants, they’ve undoubtedly noticed the price of a drink has gone up.

The city started collecting a 5% tax on alcohol on February 1, after voters passed the proposal in last year’s April election. It applies to liquor sold at bars and restaurants, as well as retail stores. This week the city released the first months take: $759,000 in tax revenue collected in the month of February. This figure, Katie Scovic with the Anchorage Mayor’s Office wrote, is “93% of the midpoint revenue projection, putting us on-target for the first month.”

The tax is expected to raise between $11 - $13 million a year. The money is slated to go to programs that increase public safety, including police and first responders. Trevor Storrs with Alaska Children’s Trust, a group which supported the tax, said the money will fund other needed programs which focus on prevention.

“The prevention of child abuse/neglect and domestic violence, really huge issues in our community as well as statewide,” Storrs said. “And then really bumping up the prevention and treatment of substance misuse and mental health.”

The tax was controversial with bar and restaurant owners who feared it could drive some of their business away. Now, more than two months in, Carousel Lounge owner Paul Berger said he doesn’t think people are drinking less. But, he said the tax came at a bad time.

“It’s hard to tell because our business has been hurt in so many directions,” he said. “How do you tell what’s hurting our business?”

But Berger said the tax was easy to keep track of. He summed it up as the “cost of doing business”.

City officials expect March revenues from the alcohol tax will be higher since restrictions on for the hospitality industry were partially lifted that month to include serving alcohol to 2 a.m.