Marijuana Tax Is Now a $5 Million Win for Alaska Child Care and Early Education

In another great example of the Alliance Effect, Alaska Children’s Trust CEO Trevor Storrs, an Alliance state ally, leaned heavily on the expertise of Children’s Funding Project, an Alliance responsive support provider for five years to help bring this new dedicated funding stream to fruition.

By Aaron Loewenberg, New America

Anchorage, Alaska will soon benefit from an additional five to six million dollars per year in funds for child care and early education thanks to voter approval of Proposition 14 in April, also known as the “Care for Kids” measure. The five percent sales tax on marijuana purchases has existed for years, but the funds will now be used for the benefit of young children and their families rather than going into the city’s general fund.

The idea of the ballot measure grew out of a realization that child care is often inaccessible and unaffordable throughout Alaska. Last year, the U.S. Chamber of Commerce Foundation estimated that the state loses about $165 million per year due to a lack of available child care. The high cost and low availability of child care are nothing new for Alaska residents, but the pandemic made those problems even more dire. “We were seeing child care centers struggling even with ARPA dollars,” says Trevor Storrs, President and CEO of the nonprofit Alaska Children’s Trust, one of the main supporters of the ballot measure.

The specific ways in which the funds from Proposition 14 will be used to benefit young children will be decided in 2024, but advocates hope to use the funds to make child care and early education more accessible and less expensive for parents while taking steps to improve the wages and benefits of providers.

“For the next year we are doing some concentrated conversations in the community with parents, providers, and experts and deciding what will be successful here,” says Storrs.

The country has witnessed a dramatic shift in attitudes towards legalized marijuana since Colorado and Washington became the first states to allow the sale of cannabis products in 2014. Currently, 24 states have legalized recreational marijuana and more are expected to follow suit in the coming years, opening up new possibilities for using tax revenue to benefit children and families. In 2022 alone, states reported a combined $15 billion in tax revenue from recreational marijuana sales, not including tax revenue from medical marijuana.

“If there’s marijuana tax revenue to be had we think early childhood and youth development should be first in line for some of those resources,” says Elizabeth Gaines, founder and CEO of the Children’s Funding Project, a nonprofit that helped advise supporters of the Anchorage ballot measure and has co-published a helpful A-to-Z guide for advocates interested in creating a voter-approved children’s fund. “In the immediate, it’s not a bad path for early childhood advocates to go down,” Gaines continued, while cautioning that, “it’s not going to be sufficient to just turn toward marijuana to support early childhood.”

One of the first steps in considering a voter-approved fund similar to Anchorage’s is understanding the taxes that localities in a given state have the authority to levy and dedicate to a special purpose. “I think people lack a basic awareness of how limited local taxing authority is….In many states, you can’t create a special purpose tax from anything except property tax or sales tax, and the options are really limited,” notes Olivia Allen, co-founder and strategy director of the Children’s Funding Project.

There were several strategic decisions made by advocates in Anchorage that helped ensure a successful outcome for the ballot measure. The fact that a marijuana sales tax already existed in Anchorage made for an easier sell to voters rather than advocating for a new tax. “We knew through conversations that people here in Anchorage would be more in favor of taking an existing funding source and dedicating it” rather than a new tax, says Storrs. In order to neutralize opposition to the measure from the marijuana industry, advocates made a point of engaging with the industry early in the process. “We reached out and really worked with the marijuana industry. They weren’t for it, but they didn’t come out fully against it,” adds Storrs.

Advocates also made a point of engaging with more conservative voters who might be wary of government spending on child care and early education. “People want to know where their money is going and that it has a purpose. People on both sides don’t want to write a blank check. They want to know why you need it, where it’s going to go, and that there will be accountability,” says Storr. After engaging with the community and hearing concerns about possible school closures, advocates emphasized that some of these schools might be able to stay open if the ballot measure is successful because early education classrooms could be housed within elementary schools. “That was really important not just to conservatives but to all community members because people don’t want their schools closing,” notes Storrs.

Storr and other advocates are excited about the Proposition 14 funds and the possibility of increasing access to high-quality child care and early education throughout Anchorage. Of course, the work does not end once the ballot measure has passed. Once the funds are being used to help children and families in Anchorage, it will be important to communicate to the public about how the funds are benefiting the city to ensure the long-term survival of the campaign. “People will come after this money if they think there’s no value to how the money is being used. In ten years you’re going to want that community understanding in case someone gets elected and says, ‘There’s $5 million dollars, let’s go after that,’” warns Storrs.

This story originally appeared in New America’s Education Policy blog.