After sharp opposition from local brewers and liquor-license holders, a wholesale municipal sales tax on alcoholic beverages failed to pass the Anchorage Assembly Tuesday evening.

The tax defeated by the 7-3 Assembly vote would have imposed overlapping levies on alcohol sold in Anchorage, which is currently taxed by the state and not the municipality.

King Street Brewing Co. owner Dan Walukiewicz told the Assembly his company already pays more than $7 in state taxes per keg of beer -- a reduced tax rate due to the size of his business, which faces much higher costs than it would in the Lower 48.

"As a small business with only 10 employees, this tax could have a huge economic effect on us," Walukiewicz said. "The effect of this proposed tax would more than triple the taxes collected by King Street Brewery and permitted back to the government. This would have a very negative impact on our price point."

The money raised by the municipal tax would have been dedicating to supporting local programs addressing health and public-safety issues related to the consumption or use of alcoholic beverages or drugs.

Business representatives like Kevin Tubbs, executive director of local hospitality-industry group Cook Inlet CHARR, complained that members have paid $500 million in state liquor taxes since 2002 but haven't seen any results from it in combating those problems.

"We want to say no to this tax," Tubbs said. "The problem we are facing is like a pie chart -- it's mental illness, opioid addiction, prescription drugs and alcohol. It's really a four-alarm fire that we face, but it seems like it's only one department that is forced to respond every time. That's the liquor licensees."

Tubbs said liquor licensees are open to helping deal with substance abuse -- which Assembly member Forrest Dunbar said the proposed tax would specifically do.

"The difference between state tax and municipal tax is we can tell where the money goes," Dunbar said. "We can direct it, we can dedicate funds, this ballot initiative actually does that. It has to go to drug and alcohol treatment as opposed to the state tax, which goes into the general fund."

Assembly members like John Weddleton emphasized that they didn't want to lean on just one industry for a city-wide problem.

"This is a fairly substantial tax, over the tax cap and that is something I know a lot of people are concerned about," Weddleton said. "The list of dedicated uses here is very broad, almost seems like it could be for almost anything. If we're going to do this I'd like to see something much more specific; I don't like choosing one industry for what is a society problem."

The Assembly spent extra time on the issue Tuesday, which became a late night after members spent an hour debating whether to ask voters for approval to sell Municipal Light & Power following a $1 billion offer from Chugach Electric.

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