A ballot proposition aims to put Anchorage marijuana tax revenue toward easing the city’s child care crisis

An Anchorage ballot proposition aims to address the city’s lack of child care through its existing marijuana retail tax.

Proposition 14, which advocates call the “Care for Kids” measure, is backed by a bipartisan group. It would take the city’s marijuana sales tax money and dedicate it toward creating more access to child care and early education. It would fund reading programs, provide resources to increase funding, wages and staffing at child care and early education programs, and prioritize using certain school district facilities for child care programs.

The measure would also create a mayor-appointed board that would determine how best to use the tax revenues to help with child care issues in Anchorage.

Advocates, families and businesses say child care is inaccessible and unaffordable in Anchorage. Care can be costly or nonexistent for families, providers must contend with a continued workforce shortage, and businesses suffer as employees are kept at home to care for children.

A proponent of the measure, Democratic former state lawmaker Ivy Spohnholz, said the purpose of the proposition is twofold: to add more child care slots and to stabilize the market by making child care more affordable in Anchorage. Spohnholz, now state director of The Nature Conservancy, said the proposition avoids being too prescriptive by allowing the city Assembly and new board to make specific decisions on implementation.

“That will allow us to be nimble, to learn, try out things, do the research in partnership with early childhood providers and the business community to determine what it is that we really need to make investments in,” she said.

Allocations could potentially take the form of vouchers or grants to individual families, grants to early learning centers, and additional funding to round out the school district’s half-day, pre-kindergarten program, she said.

At present, the city’s $5 million to $6 million in annual marijuana tax money goes to its general fund. Spohnholz said the city is in a good fiscal situation, so the ballot proposition isn’t a choice between road plowing and child care.

“We think that the Municipality of Anchorage will be able to achieve both of those goals,” Spohnholz said.

The ballot measure also includes a provision to lower the municipality’s property tax cap by $1 million, which Spohnholz said is an assurance to voters that the measure doesn’t grow the budget. The proposition also lowers the maximum the city can tax marijuana, from 12% to 10%, though it currently taxes at 5%.

The measure removes marijuana taxes from under the municipal tax cap, which could increase property taxes. Measure proponent Eric Croft, a former Democratic state lawmaker and Anchorage Assembly member, said any property tax increase would be modest. The money being moved out from under the tax cap is small relative to the overall municipal budget — and the gap could be filled in other ways, he said.

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“That is a risk (of increasing property taxes), we’ve minimized it, it’s a relatively small risk,” Croft said. “And it’s for a cause of a growing economy and adequate child care that’s worth that risk. I’m not saying it doesn’t exist, but I’d say the risk of it having that impact has been minimized by the way we wrote it, and it’s for a really good cause. The biggest threat to a property owner in Anchorage is continuing economic decline.”

Jana Weltzin, who owns JDW Counsel, which works with the marijuana industry, said that she is generally supportive of putting the taxes toward a good cause. She said there is some apprehension over dedicating a tax to a favorable beneficiary, which could potentially increase marijuana taxes more rapidly than they otherwise would, she said.

Statewide, access to child care is difficult, said Stephanie Berglund, CEO of thread, a private nonprofit that works to improve access to affordable child care and has endorsed the measure.

Over the three years since the pandemic started, a fifth of child care programs permanently closed, exacerbating a pre-pandemic child care shortage in the state.

“The biggest challenge in why the shortage feels even greater than typical is, of the programs that are open, many are not able to serve their full capacity because they have a workforce shortage,” Berglund said.

Branwen Collier runs a child care program with three locations and therapy clinics for children with autism called Early Learning for Everyone in Anchorage. She said their waitlist has 280 families, and families looking for a spot right now won’t be able to get one until fall 2024.

“Obviously, there’s still a huge need for it in the community, and no one can really expand because there’s just not the people,” she said.

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To hire more people, they need to be able to pay staff more, she said. To do that, providers have to charge families more, which prices people out of child care. She said random grants, like federal COVID-19-era dollars, won’t solve the problem.

Spohnholz said that one of the upsides of dedicating the marijuana tax, a growing market, toward child care is it provides stable funding.

Affordable and accessible child care is also a major issue in the state’s business community. Kati Capozzi, president and CEO of the Alaska Chamber, said the group doesn’t take positions on local ballot propositions but “the business model in general for child care is just broken.”

Capozzi said child care is a top concern for the chamber’s 700 or so members, which includes businesses big and small in industries statewide.

“It’s really at every level,” Capozzi said. “It impacts employers because their employees are having a hard time finding care. It impacts the parents and the employees looking for care. In some cases, the problem is affordability. But in a lot of cases, especially in Alaska, the problem is that the facilities don’t even exist.”