Fish harvesters, processors work on budget plan

  • By DJ SUMMERS
  • Monday, October 31, 2016 10:53pm
  • News

Fish harvesters and processors might not agree on much, but everyone hates taxes.

Commercial fishing stakeholders took turns in 2016 tearing apart a commercial fisheries tax plan from Gov. Bill Walker that the Legislature batted around during the marathon session but eventually dropped.

The industry has such diverse needs and complex features that the bill couldn’t hit the revenue target without hurting one industry segment more than another.

Stakeholders also objected to a holdup with a range of other industry taxes introduced by Walker. As none of the other taxes moved out of committee, House Fisheries Committee Chair Rep. Louise Stutes, R-Kodiak, tabled the fishing taxes until she could be sure the industry wouldn’t take a hit none of the other industries would face.

Months later, Walker bundled the fisheries tax into a bill with mining and fuel taxes. The bill stalled.

Fisheries stakeholders might have a fix. At an October meeting of the United Fishermen of Alaska, the state’s largest harvester group, fishermen decided to knock heads together instead of against the legislative wall.

“(Pacific Seafood Processors Association) and UFA have agreed to sit down and work together to address the tax issue that’s being put before the Legislature,” said Glenn Reed, president of the Pacific Seafood Processors Association, or PSPA.

PSPA is an industry group that represents companies which control a sizable chunk of the processing facilities that ring Alaska’s coastline and serve as the harvest’s first point of market entry.

PSPA was one of the more vocal critics of a commercial fisheries tax plan. Major sticking points for PSPA included a canned salmon tax that would put a dent in export business.

Reed said the meeting hasn’t taken place yet pending PSPA’s own schedule needs.

“I was invited to UFA’s annual meeting to talk about the tax plan we had last year and a response to the governor’s proposals,” Reed said. “In the context of that response, we and UFA committed to working together on a tax program this coming session.

“The steps that need to be taken as I understand them, UFA board is going to appoint a committee, four to seven people, a handful of people, and let me know when they get that done and we’re going to start sitting down and having some discussion.”

Reed clarifies that neither group is looking for increased taxes, per se.

“We sat down and said, ‘What we’d really like is a world without taxes,’” he said. “But that’s not a possibility.”

UFA representatives confirmed the plan and place the meeting tentatively in the first weeks of November.

New fisheries taxes aim to grow roughly $15 million in new revenue.

For the fishing industry, funds are a matter of survival for both ADFG, which manages fisheries, and the Alaska Seafood Marketing Institute, which promotes Alaska’s seafood.

Walker will submit his fiscal year 2018 budget in December. That budget will include another round of cuts for the Alaska Department of Fish and Game.

Walker hinted during a bill signing in Kodiak that he was looking at corporate income tax in addition to the industry taxes. So far legislators haven’t hinted at what taxes might make their way onto the floor.

In the last few years, ADFG’s budget has plummeted $15 million dollars — a 30 percent decline from $50 million in fiscal year 2015 to $35 million in fiscal year 2017.

Forrest Bowers, the deputy director of the Commercial Fisheries Division of ADFG, said the department has been told to brace for another 10 percent to 14 percent cut in Walker’s upcoming budget proposal, bringing the total unrestricted general fund allotment for ADFG to less than $30 million, nearly 40 percent less than just three years ago.

ASMI cobbles together revenue from a mixture of matching state general funds and private industry payments and federal receipts.

In the same timeframe, ASMI’s state funding has dropped along with ADFG’s. In fiscal year 2013, the legislature appropriated $7.8 million. In fiscal year 2017, the Legislature appropriated $2 million — slashed down from $3.8 million proposed by Walker — along with a note asking the institute to wean itself off state funds.

“It is the intent of the Legislature that the Alaska Seafood Marketing Institute develop a plan to phase out reliance on unrestricted general funds for seafood marketing by fiscal year 2019 and continue marketing on industry contributions,” the note reads. “Further, it is the intent of the Legislature the plan includes consideration of increasing revenue from industry contributions to maximum allowed by law and deliver a report to the Legislature not later than Jan. 1, 2017.”

DJ Summers can be reached at daniel.summers@alaskajournal.com.

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