• Homer receives little revenue for its across-the dock seafood products
By Naomi Klouda
A redistribution of the Fisheries Business Tax could net the City of Homer $800,000-$900,000 a year, if amendments to a current law get passed by the Alaska Legislature.
The process has just begun as one of the top tasks assigned to the city’s new lobbyists, Linda Anderson and Yuri Morgan. The first step is to build a coalition of support from towns in coastal areas that would also benefit from the tax restructure, City Manager Walt Wrede said.
As it is now, 50 percent of the raw fish tax goes to the state and 50 percent to towns that have fish processing plants. But ports where the activity amounts to icing down fish and hauling it out receive no tax.
“This amounts to changing an antiquated law that was written when we had a lot of canneries,” Wrede said. “Now the market is for fresh fish. The law was written at a time when every town had a cannery, with the idea the state keeps 50 percent and 50 percent goes to the municipality. Our problem is that in Homer, we are a huge halibut port but we don’t process halibut here.”
Even though more halibut crosses the Homer docks than anywhere in Alaska, the city benefits very little in terms of the tax, with a share of $73,801 in 2010. Consider the share would be more than 12 times that amount if reconfigured.
The Homer port generated 22 million pounds of seafood in 2009 and is ranked 36th for the nation, according to the National Marine Fisheries Service numbers. In comparison, Dutch Harbor produced 506 million pounds; 283 million at Kodiak; Sitka at 78.4 million and 29.3 million out of Seward.
All together, Alaska’s fishing ports generate $16 million for the state, and $16 million for municipalities, according to state figures.
But the history of previous attempts to get the tax reconfigured for distribution to reflect seafood’s new fresh-market reality haven’t bode well. Rep. Paul Seaton, R-Homer, introduced two previous bills, House Bill 84 in 2006 and HB 25 in 2004. The latest effort died in the Fisheries Committee.
Seaton’s bill, HB 84, stated as rationale for the change that the Department of Revenue definition of processing in 15 AAC 75.300 does not include “decapitating shrimp and gutting, gilling, sliming, or icing a fisheries resource.”
“The Fisheries Business Tax paid on a growing amount of fisheries resources is not returning to the municipalities where the resource was landed and handled. This includes troll-dressed salmon rushed to fresh markets in the Lower 48, halibut sent out by truck to be processed elsewhere, and other live or whole seafood exported directly to customers outside of the state. This is clearly a case where the market is functionally growing away from the tax system,” Seaton’s sponsor statement read.
The idea isn’t to take from the $16 million in state revenue. It’s to rework the component in the sharing formula, Seaton aide Louie Flora explained.
This likely is a two-year process with no new bill introduced just yet. The need to build support among communities and discuss the changes necessary to bring a better share back to ports missing out due to modern consumer-driven changes in seafood processing will be key, Wrede said. During a trip to Juneau, Mayor Jim Hornaday, Councilman Bryan Zak and Wrede met legislators to discuss the tax, among other issues. A trip to Homer including a tour of the port by the new city lobbyist team, Linda Anderson and Yuri Morgan, illustrated the problem more clearly to them.
“We’re closer to reality on the fish tax. We heard loud and clear, and today saw first hand why that’s even more important than what it looks like on paper,” Anderson said. “We’ll be taking a different approach to it, but one that is wise in that it will garner more support in the communities. It could cost the state a bit more, but it would keep the communities whole so there aren’t going to be losers.”
The challenge now is to make the tax changes fair enough that communities don’t stand to lose in the process.
Comments are closed