Anchorage child care fund squeezed by programs moved from alcohol tax

The Anchorage Child Care and Early Education (ACCEE) Fund does not have enough money to do what it was designed to do, according to board members who met June 17 to work through budget projections. Two programs shifted from the alcohol tax now consume more than $2 million of the fund's $5.2 million cannabis-tax base before the board allocates a dollar to operational grants or capital projects, leaving licensed child care providers and families who depend on subsidy programs with less funding than the board says the fund was built to deliver.

Anchorage voters approved Proposition 14 in April 2023, dedicating cannabis tax revenue to the ACCEE Fund. Municipal staff projected roughly $5 million in annual revenue based on 2023 collections, and the fund was built around that figure. But two programs were subsequently moved from the alcohol tax: a $2 million annual allocation to Anchorage School District pre-kindergarten classrooms, which funds eight additional classrooms in Title I schools, and a $125,000 grant to Best Beginnings for its Imagination Library, a free monthly book program for children from birth to age 5. Together they consume $2.125 million before the board reaches its core mission.

Board Chair Trevor Storrs, president and CEO of Alaska Children's Trust, said the fund is constrained by the $5.2 million base and the extra burden placed on it that never existed when the board was first creating and implementing programs. He noted the fund was conceived to grow the child care system, not absorb programs already supported elsewhere: when the board worked for the $5 million, moving those programs over was never part of the plan.

To set the stage for the June 17 discussion, Storrs walked the board through last year's budget as a baseline reminder. In that prior year, operational grants stood at $2.4 million, early education child care subsidies at $1.625 million, the Anchorage School District allocation at $2 million, and pilot and capital projects at $1.25 million. Storrs said moving the school district and Best Beginnings back to another funding source would save more than $2 million and free at least $500,000 for additional pilot or capital work while still allowing the board to fund operations and capital at prior levels.

"We do not have enough funds to do what we want to do," Storrs said. Board member Jessica Simonsen, who serves in an Anchorage School District early childhood role and disclosed a conflict of interest before the district discussion, described the situation plainly: "the fact that it's supposed to be in alcohol tax is hugely detrimental to the ACE Fund, right? Detrimental in whichever way you want to kind of look at it. Hugely beneficial to the community and hurting the $5 million, right?"