Alaska fishing towns would forfeit $28M in fish tax under Dunleavy budget

Sitka’s ANB Harbor in 2014 (KCAW photo/Greta Mart)

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

“The governor’s budget is — the message he’s sending is that we’re simply — we’re out of time and we’re out of money,” said Dunleavy’s press secretary Matt Shuckerow.

Landing and business taxes on fisheries – often referred to as raw fish tax – are collected by the state.

Half that revenue is shared with the city and/or borough where the fish are received or processed. Ending the revenue sharing would save the state about $28 million.

“That requires legislation, so you’ll see legislation introduced in the coming days to support the proposal,” Shuckerow said.

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

The City of Cordova is only about 2,300 people but boasts the largest commercial fishing fleet in Alaska.

Mayor Clay Koplin said right now his city operates on a lean $10 million budget.

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

Revenue from fish taxes covers more than 11 percent of his city’s expenses.

And while Cordova’s seafood sector has been growing rapidly as one of the top 20 seafood ports in the nation, Koplin worries about losing such a huge chunk of the city’s revenue.

“We’re on a good trajectory,” Koplin said. “This is just like putting the brakes on. Taking that local revenue to keep us, supporting and growing our economy will be devastating, frankly.”

The communities of Sitka and Kodiak would also be hit hard.

But the biggest blow would be to the City of Unalaska, home to the Port of Dutch Harbor. The community is projecting to receive about 8.3 million dollars in its share of fish taxes — about 27 percent of the city’s revenue.