The Anchorage Budget and the Coming 2028 Fiscal Cliff
Anchorage is running out of runway. The city has one more year before the hard choices arrive. Public testimony was taken by the Anchorage Assembly on Wednesday concerning Mayor Suzanne LaFrance’s $692.5 million spending plan for 2027, which the members will review on Nov. 17.
On paper, the budget works. To balance a $15 million shortfall, it cuts unfilled jobs and relies on temporary funding sources, such as roughly $8.4 million derived from selling Municipal Light & Power. The 2027 budget goes all the way up to the city’s tax cap. But municipal leaders acknowledge that this approach carries an expiration date.
Budget Gap Projected to Double as Costs Climb
The financial pressure intensifies significantly beyond the next twelve months. Expenses related to construction, shipping, energy, and health insurance are driving the upcoming deficit up to an estimated $30 million by 2028, roughly doubling the current gap. Staff health insurance alone is expected to rise about $3.6 million next year.
Mayor LaFrance has warned of a “fiscal cliff” for more than a year. Her administration has already shown residents what cuts could look like. A list of about $19 million in possible reductions come 2028 includes:
- Closing the Bartlett, Dimond and Service pools
- Closing the Muldoon Library
- Cutting 21 community service officer positions
- Cutting seven heavy equipment operators who plow city streets
The proposed budget is about $35 million larger than this year’s $657 million budget.
Officials Weigh Sales Tax Proposals Amid Resident Skepticism
Before ultimately shelving the idea, Mayor LaFrance introduced a 3% tax last year as a potential mechanism to reduce property levies. A University of Alaska study estimated it would raise about $173 million a year. Assembly Chair Anna Brawley says more residents are open to the idea now than ever before.
Any return of a sales tax, however, faces stringent skepticism from residents already stretched thin by inflation, fuel prices and tariffs—pressures acknowledged by the mayor’s chief of staff, Susanne Fleek-Green. City leaders point out that a ballot initiative for new revenue in April would arrive too late to bridge the 2028 shortfall, thereby strengthening the case for proactive and restrained budget cuts.
At the same time, municipal leaders caution against assuming financial rescue will come from the state level. Even if Democrats take control of both the Legislature and the governor’s office, counting on an influx of extra funds, revenue sharing, and bonds for the municipality would be erroneous. Adding to the local economic pressures, state-level discussions could also introduce a new income tax impacting every resident of Anchorage alongside municipal levies.
With $1.3 billion in unaddressed stormwater costs, relying on temporary funds to plug yearly deficits has simply delayed the inevitable reckoning. As the Anchorage Assembly prepares for its Nov. 17 consideration of the 2027 budget, the decisions made over the next twelve months will determine whether the city manages its structural deficit through deliberate planning or reactive crisis management.
