Fishermen, processors respond to fish tax proposal

Feb 19, 2016

Despite acknowledging the need for more revenue, fisheries stakeholders raised lots of questions about the governor's plan to increase state fisheries taxes this week.

Tax Director Ken Alper is shown in this photo.
Credit Courtesy KTOO

To help fill the state’s budget gap, Alaska Governor Bill Walker has asked legislators to consider a variety of tax increases – including raising fisheries taxes by one percent. 

During a House Fisheries Committee hearing on Thursday, state tax director Ken Alper explained that the increase, estimated to bring in an additional $18.4 million, essentially would make fish revenue match the cost of fisheries management.

“The intent was to generate in the neighborhood of $15 million to $20 million dollars of unrestricted GF for the state based on management costs.”

At the same time, Alper said the administration didn’t want to totally overhaul the current structure of fisheries taxes. The increase would apply to a variety of taxes, including the raw fish tax and the landing tax.

“There are embedded features in existing statute that the governor did not want to look to upend," Alper said. "For example, the percentage shares of municipal revenue sharing, or the different existing tax rates between an onshore vs a floating vs a cannery. Those are fully within the legislature’s discretion to move those around. It’s not that 1 percent was a dartboard solution, it was the most rational solution to try to come up with the desired amount of additional funding.”

But some fishermen said that applying a one percent increase for all taxes would have different impacts in different fisheries, and wasn't necessarily an equitable way of raising revenue.

Mostly, the committee heard from fishermen and industry representatives who said they know the state needs new revenue, but didn’t understand or support the exact increase proposed.

Seward fisherman and direct marketer Rhonda Hubbard told the committee that the industry needs more time to help craft a plan.

“Fisheries tax is very complex," she said. "It’s probably one of the most complex tax components within the department of revenue. Those taxes do need to be updated. And while it’s admirable that the administration, departments are coming together providing you the information, everything. I think we, as an industry, need to be a part of that meeting, or also come together with them, in creating some more equitable ways of taxing our industry.”

The committee will take more testimony on the proposed fishery tax increases on Tuesday at 10 a.m.