Alaska Fishing Towns Would Forfeit $28M In Fish Taxes Under Dunleavy Budget

Feb 18, 2019

Pollock moves through UniSea's processing plant in Unalaska. In fiscal year 2020, the city expects to receive $3.8 million in fish taxes through state revenue-sharing.
Credit Berett Wilber/KUCB

Gov. Mike Dunleavy's proposals for balancing the state's budget include a plan to stop sharing millions of dollars in taxes on commercial fishing with coastal communities.

"The message he's sending is that we're out of time and we're out of money," said Matt Shuckerow, Dunleavy's press secretary.

The state collects landing and business taxes on fisheries, often referred to as raw fish tax.

Half of the revenue is shared with the city or borough where the fish is received or processed, so ending that revenue-sharing would save the state about $28 million.

"That requires legislation," said Shuckerow. "So you'll see legislation introduced in the coming days to support the proposal that's in the budget — and that would be to remove the tax sharing of fisheries business resources for municipalities."

The cost savings would largely be at the expense of communities with seafood economies.

The City of Cordova boasts the largest commercial fishing fleet in Alaska, and Mayor Clay Koplin said the community of 2,300 people currently operates on a lean $10 million budget.

"We were operating on a $12 million-a-year budget," said Koplin."We made significant cuts, largely in response to prior cuts by the state."

Fish tax revenue covers more than 11 percent of Cordova's expenses. And while its seafood sector has been growing rapidly as one of the nation's top 20 ports, Koplin said he worries about losing such a huge chunk of revenue under the governor’s proposal.

"We're on a good trajectory," he said. "This is just like putting the brakes on. Taking that local revenue [that will] keep us supporting and growing our economy will be devastating, frankly."

The City of Unalaska would also take a big financial hit if the state stops revenue-sharing.

According to recent projections, Unalaska is expecting to receive about $8.3 million from its share of fish taxes in the next fiscal year. That's about 27 percent of the city's projected revenue.

City Manager Thomas E. Thomas declined to comment on the fish tax issue last week, saying local officials are still reviewing the governor's proposal.

"We're assessing it as we go through, identifying where we get funding and how it impacts [us]," said Thomas. "And things could change. This is just a proposed budget. As it goes through the legislative process, things get put back in.

"But a lot of things are up in the air now," he continued. "This is a very different approach they're taking to the budget this year."