New Alcohol Tax Creates Unknowns When Balancing City Budget

May 5, 2016

City of Bethel. Photo by Dean Swope/KYUK

Bethel City Council began its five-day series of special meetings Tuesday night to craft the city’s budget. But a gaping unknown stands in the way of balancing the numbers: the new revenue from alcohol sales.

Legal alcohol sales began last month at a 12 percent tax rate, and Bethel has no reliable model for generating the expected revenue from the new stream.

City Manager Ann Capela estimates the city will take in roughly $500,000 from alcohol sales this year. She’s basing her calculation on Bethel’s annual tobacco tax revenue and the revenue other rural Alaska communities like Kotzebue bring in from alcohol.

But the council says it doesn’t know how much to trust these numbers.

Alcohol was not the only difficult item to balance. The changing cost of healthcare for city employees and the possible update to the city’s water and sewer system also created snafus.

Special budget meetings will continue through next week.