Group proposes first child care spending budget for Anchorage’s marijuana tax

After Anchorage voters in 2023 approved a proposition dedicating all of the municipality’s marijuana tax revenue to boost child care access and early education programs, the city will soon decide on its first annual spending plan for the new fund.

A local task force this week published a report proposing an $8 million budget for spending the Anchorage Child Care and Early Education Fund in 2025.

The tax is expected to bring in around $5 million per year. Because money has been accumulating in the fund since January, the city has a few million more for one-time spending projects in 2025.

Early education advocates, families, businesses and economists have long said that child care in Anchorage is inaccessible and unaffordable.

There aren’t enough child care and early education services in Anchorage because providers can’t recruit and retain employees, according to the task force report. That’s largely due to “pay below a living wage and lack of benefits.”

Jessica Simonsen, a local parent and co-chair of the task force, said in a statement that the report “reflects 10 months of work to understand the problem at hand.”

“The sector is in crisis; the expected $5 million in annual revenue is not enough to fill the deep need for funding throughout the sector, but we must begin somewhere,” she said. “It’s our belief, building on the feedback of hundreds of parents and practitioners throughout this process, that we should start with improving access, and our proposed budget aims to do that.”

The task force’s report said that increasing wages is a critical goal, with current hourly wages for early childhood educators “well below a living wage” at an average of about $15 per hour. But even if all of the funds went toward wages, that would only result in an increase of about $1.27 per hour for the roughly 1,700 early educators in Anchorage. The increase would not make pay competitive enough to attract or retain workers, the report said.

Here’s how the task force said the city should spend the money instead:

• It proposed directing $2 million to subsidize the cost of child care for workers in the early education and child care sector who have children. The report said a similar state program in Kentucky that made all child care employees eligible for state-funded child care was “immediately successful.” It resulted in more workers in the sector and a sharp increase in child care availability overall.

• It said the city should use $2.4 million as grants to existing licensed child care and early education organizations to help with operational costs. That would provide each facility about $12,766.

• The rest of the expected annual funds should be set aside for costs of board administration and tax collection; about $780,000.

• Additional revenue from 2024 should be used for “innovative pilot projects,” according to the task force. It suggested spending about $2 million in “targeted funding to particular strategic projects,” with a goal of inspiring “confidence and further investment in the sector.”

• Another about $500,000 should be used as capital funding grants to support existing facilities in small-scale, minor improvements.

• And about $200,000 should be used as start-up grants for new in-home child care facilities.

The task force that proposed the child care and early education budget includes Carl Jacobs, vice president of the Anchorage School Board, and Assembly members Kameron Perez-Verdia and Anna Brawley, along with 13 other community leaders and parents.

Ultimately, Mayor Suzanne LaFrance’s administration and the Anchorage Assembly will choose exactly how to spend the money when they finalize next year’s city budget later this fall.

Eventually, a nine-member Anchorage Child Care and Early Education Board will be appointed by the mayor and confirmed by Assembly vote. That board will then propose a spending plan for the fund each year, instead of the task force.