A few years ago, I did some preliminary reporting on how much the state actually makes in taxes from the commercial fishing industry, minus state-funded management of, and state-funded infrastructure for, the industry. What I began to suspect: When we’re just talking about pure state-coffer cash, it appears that we’re actually losing money on the multi-billion dollar commercial fishing industry, touted as the second-largest industry in Alaska. An important caveat: this does not include money that gets funneled through the state from industry-wages—though the value of those wages are less specific because we don’t have a broad-based income or sales tax. Nor does it include money localities get from fees and taxes on the industry, which might otherwise come out of general-fund revenue.
I was reminded again about that story when I looked at the DOR’s report on revenue released yesterday and read that the state actually brings in more money from taxes on tobacco than it does from taxes on fisheries, and mining, for that matter. In FY 2015, the state is projected to bring in only $26.7 million from fisheries, and only $24.7 million in FY 2016.
A commenter, who appears to know what he/she is talking about, says that when the numbers are crunched, the state actually subsidized the commercial fishing industry by as much as $60 million a year. Read on:
Alaska continues to subsidize commercial fisheries management to the tune of $60 million plus.
Fisheries taxes, business and landing, is about $25 – $30 million, but that revenue is roughly one third the cost of commercial fisheries management, not including state infrastructure for ports, hatcheries, remote airports that service primarily commercial fisheries…
Fish are a public resource to be used for the maximum benefit of the people of the state.
Commercial fisheries utilized 98.2 percent of all fish and game harvest in Alaska in 2012, or 3,240 million pounds. Private use (commercial profits) is subsidized by $50 – $60 million-plus annually drawn from the state general fund, over and above monies generated by the current fisheries taxes. In 2012, the $50 – $60 million subsidy generated about $1.3 million in ex-vessel values (harvesters) and $3,5 million in first wholesale value (processors + harvesters).
For each pound of commercial fish product leaving the state it generated roughly $1 of revenue. It cost the state about 3 cents a pound to manage these fisheries, of which the commercial fisheries tax revenues generated about 1 cent per pound.
It will be up to the Legislature to determine if the seasonal and low profit margin commercial fishing industry can afford any increase in their tax structure, or should the state continue to subsidize this industry, or should it look to cut overhead management costs, which could threaten the future sustainability of the fisheries or force them into more conservative management regimes from less comprehensive management and oversight.
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