Anchorage Assembly Budget Work Session on 2026 Budget: 120-Day Memo - September 12, 2025
STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE
Anchorage Assembly Budget Work Session on 2026 Budget: 120-Day Memo - September 12, 2025
On September 12, 2025, from 1:07 PM to 3:00 PM, the Anchorage Assembly held a work session to review the administration's 120-day memo, which provides preliminary revenue estimates, tax limit calculations, and budget priorities for the 2026 fiscal year. The meeting included presentations by Mayor LaFrance and Office of Management and Budget (OMB) Director Brawley, followed by discussion with assembly members. Key topics included the tax cap, declining state funding, capital project prioritization, and organizational changes.
Discussion Items
- Mayor's Opening Remarks: Mayor LaFrance emphasized the municipality's 50th anniversary and the need for open conversations about budget challenges. She outlined priorities: staff recruitment and retention, public safety and crisis response, stable year-round housing, and community investment. She noted limited resources, reliance on property taxes, and the tax cap.
- 120-Day Memo Overview: OMB Director Brawley explained that the memo, required by code, includes preliminary 2026 revenue estimates, tax limit calculation, administration priorities, proposed reorganizations, capital budget, and utilities/enterprises budgets. She highlighted that the state and federal revenue decrease of $3 million is due to reduced community assistance and SEMT projections.
- Proposed Reorganization: The administration proposes splitting the Community Development and Public Works columns into two separate departments, eliminating a layer of middle management. Municipal Manager Wim Pearson stated this supports the mayor's housing agenda and is organizationally rational.
- Tax Limit Calculation: The preliminary tax limit is $367 million, about $12 million more than the 2025 revised number. The calculation includes backing out one-time items (e.g., ARDSA levy, emergency ordinances) and adding projected revenues. The population number used for the calculation has historically come from AEDC, but AEDC is no longer providing that report, requiring a new baseline.
- Capital Budget and Program: The 120-day memo includes $105 million in departmental requests for capital projects, but this is not the bond request. OMB noted that the six-year capital improvement program totals $1.2 billion, but many line items are actually maintenance costs that should be in the operating budget. Assembly members requested clearer guidance on what can go on a bond.
- State Funding Decline: OMB presented a 10-year comparison showing that between 2005-2014, the state provided over $1 billion in capital and revenue sharing, but from 2015-2024, only $300 million (excluding port funding). This $700 million loss has strained infrastructure maintenance. Assembly members expressed concern about the deterioration of roads, sidewalks, and buildings.
- SAFER Grant and Fire Department Staffing: The SAFER grant for the fire department will leave a $2.6 million deficit in 2026. The department applied for continued funding but with a reduced rate and a match requirement. The grant currently supports 18 firefighters, but the municipality has not yet achieved full four-pack staffing at all stations.
- Mobile Crisis Team Funding: Discussion about using SEMT revenue for the mobile crisis team (MCT). OMB noted that SEMT is now directed to the fire department, and any additional SEMT funding could support MCT, but current projections show a decrease in SEMT revenue.
- Assembly Budget Priorities Resolution: The assembly passed a resolution on budget priorities on September 9, 2025. OMB indicated that many priorities align with the administration's, but specifics on achievability will be determined as the budget is developed.
- CASA Program: Assembly members discussed the need for a fair process for reviewing proposals for the CASA (Chugach State Park Access) program. OMB reported that Kent Cole House has been conducting outreach, and an advisory group with geographic diversity is being formed.
Key Outcomes
- Next Steps: OMB will provide a follow-up report on the room tax decline assumptions and the SAFER grant details. They will also create a one-page guide on bond-eligible projects for assembly members.
- Referrals: The capital budget work session is scheduled for October. The budget and finance committee will continue discussions on the 120-day memo.
- Directives: The administration will work to align the budget with the assembly's priorities and will communicate progress to avoid surprises. The assembly will forward names for the CASA advisory group.
- No Formal Votes: This was a work session; no votes were taken.
Meeting Transcript
Not hearing anyone else on the phone. As soon as Miss Brawley comes around the corner, we'll get started. We're on the record from one to 3 p.m. It's now 107 p.m. We're getting a bit of a late. Start start with introductions, Mr. Gerker. Chair Gerger here. Daniel Ball. Anna Brawley. Christopher Constant. Yara Silvers. On the phone, Mr. Myers. Yes, thanks, Chair. Thanks. Anyone else on the phone? All right. So it feels like we're having a little feedback with the mic. So just make sure when you're not talking, you turn your mic off. With that, then I'm gonna let the budget go chairs make brief introduction and then we'll hand it over to the administration. Yeah, and I'll be very brief because this is really the administration's presentation, but um this is kind of one of our first official uh briefings on a piece of the budget. So they'll go through kind of what that is and why. Um so thank you everybody for being here. And I will just also refer back on Tuesday, we passed our um assembly resolution on budget priorities. Um, I am blanking on the number of that, um, but um hoping to continue that conversation of how those high-level priorities are reflected in the budget and as we move through the process. So um with that, I'm gonna turn it over to others. All right, anything else to add from the budget? No, okay. Ms. Brows. Thank you, Mr. Chair. I would like to ask the mayor to open us up here with some remarks about our 120 memo. Thank you, Director Brouse, and thank you, Mr. Chair. So hello, everyone. Thank you for making time to be here today. And as we get begin the budgeting process for 2026, as you know, we're also celebrating the municipality's 50th anniversary. It's a great time to really think about where we are as a community and how we got here. It's also a great time to have open direct conversations with each other and community members about our budget challenges, our community needs, and where we want to be in the next five, 10 or 50 years. The municipal budget is a plan for turning our values and priorities into action. It's a roadmap to our community's future. My administration is committed to working with the assembly and the public to build a stronger, more resilient, more affordable, and safer anchorage for all. We all know the municipality's resources are limited. Our operating budget relies mostly on property taxes. We are bound by the tax cap. Like me, you all probably hear daily from residents about road repairs, camp abatements, fire and police response, park maintenance, and more. And we're prioritizing investments in community development, parks and trails, libraries, housing solutions, and other steps to ensure Anchorage is an affordable place to live and attractive place to do business. And I just want to note too, when I say Anchorage, I'm referring to the municipality of Anchorage.
openpublica.com