‘The cliff is just about here’: LaFrance administration warns city could face a roughly $30 million budget deficit in 2028

ANCHORAGE, Alaska (KTUU) - The LaFrance administration has proposed a $692.5 million operating budget for next year, one that it says is a fairly flat continuation budget from 2026.

“Which means that we are proposing the 2026 service level at the 2027 cost,” Ona Brause, with the Municipality of Anchorage, said. “As of right now, the percentage and the way we spend our money is about the same as it has been for the last 20 years.”

The municipality also warns it’s entering 2027 with an almost $15 million budget deficit.

“We’ve avoided making major service level cuts through disciplined financial management, trimming non-essential spending, eliminating about a million in vacant positions, and using 12 million in one-time funds to close the gap,” Mayor Suzanne LaFrance said. “We’ve protected essential services for now. We’ve patched the gap for 2027 with funding we won’t have next year.”

This past year, the administration said it eliminated unfilled positions, reduced contracts and told departments to prepare budgets with a 5% cut.

“As far as for the future, we need to have conversations with the public about our level of services here in the municipality,” LaFrance said. “It’s a fact that our costs here at the municipality continue to rise at a level that is higher than our revenue. So, we have some choices ahead.”

A fiscal cliff, fast approaching

In November 2025, the Anchorage Assembly and the LaFrance administration established a $656.8 million budget for 2026. During LaFrance’s initial proposal of the budget in October 2025, LaFrance warned that the city was reaching a “fiscal cliff” and would need to look for other sources of revenue.

That cliff, LaFrance warned on Friday, is almost here.

“The cliff is just about here, and we don’t have any more runway,” LaFrance said. “Unless we see a really big increase in outside support or establish a new revenue source, you will hit that fiscal cliff next year…We’ve busted open our piggy banks and bought ourselves one more year.”

In 2028, the LaFrance administration said, the city could be facing a nearly $30 million budget deficit.

“It is the last year before we get to the hard decisions that we’ll have to make about whether or not we are taking the path towards investment in new revenues or adjusting service levels and reducing what we are able to do within the community,” Brause said. “As the mayor mentioned, the math doesn’t balance and so we have to make the real choices of what we are going to do.”

The LaFrance administration said cuts going into the future — ranging from the possibility of closing libraries to closing a fire station — are a reality.

“These are all costs that are real and when we’re talking about having to take a 5% reduction within the municipal budget, we are going to have to touch core services,” Brause said. “It’s important for us to understand what the community is interested in doing.”

Over the course of the next year, the administration said it plans to focus on examining areas that may face cuts and having conversations with the community.

“We have found a way to get through this next year with minimal impact,” LaFrance said. “And then as next year’s budget is prepared, that’s when some really big decisions will need to be made.”

Focus going into 2027

For next year’s budget, the LaFrance administration noted its priorities include strengthening local government, reinforcing the recreation and tourism economy and revitalizing neighborhoods.

The LaFrance administration announced that the budget will also focus on investing in the following areas:

• Investment into street maintenance and options (including snow plowing)
• Public Safety and infrastructure
• Housing shortage
• Refreshing public spaces such as parks, trails, libraries and recreational centers
• Crisis care and homelessness

“This budget funds core municipal services while making targeted investments to improve community safety, support affordability, and encourage economic growth,” LaFrance said.

Part of the bond package that LaFrance is also introducing for next year includes replacing fire apparatuses and investing in additional ambulances.

“These proposed bond projects reflect not only critical maintenance needs but will also make significant investments in the areas that make our community a good place to visit, work, live, raise a family, and own a business,” LaFrance said.

The LaFrance administration is set to present its proposed budget to the Anchorage Assembly Oct. 6.

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