Legislature(2019 - 2020)BELTZ 105 (TSBldg)
03/21/2019 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB63 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 63 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 21, 2019
3:31 p.m.
MEMBERS PRESENT
Senator Click Bishop, Chair
Senator Chris Birch, Vice Chair
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Mia Costello
Senator Lyman Hoffman
COMMITTEE CALENDAR
SENATE BILL NO. 63
"An Act repealing the fisheries business tax allocation to
municipalities; repealing the refunds to local governments of
fisheries business taxes; repealing revenue sharing for the
fishery resource landing tax; providing for an effective date by
amending the effective date of Sec. 36, Ch. 61, SLA 2014; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 63
SHORT TITLE: FISH TAX: REPEAL MUNI REFUNDS/REV. SHARE
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/18/19 (S) READ THE FIRST TIME - REFERRALS
02/18/19 (S) CRA, FIN
03/21/19 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
BRUCE TANGEMAN, Commissioner
Alaska Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Provided an overview of SB 63.
BRANDON SPANOS, Deputy Director
Tax Division
Alaska Department of Revenue
Anchorage, Alaska
POSITION STATEMENT: Addressed tax questions related to SB 63.
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Provided an overview of the impact of SB 63
and the effect of fisheries taxes on all Alaska communities.
JON ERICKSON, Manager
City & Borough of Yakutat
Yakutat, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
LAYTON LOCKETT, City Manager
City of Adak
Adak, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
PHIL ZAVADIL, City Manager
City of St. Paul
St. Paul, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
PAT BRANSON, Mayor
City of Kodiak
Kodiak, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
ANNE BAILEY, Administrator
Aleutians East Borough
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
GARY HENNIGH, City Administrator
City of King Cove
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
CLAY KOPLIN, Mayor
City of Cordova
Cordova, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
MARY SWAIN, Assembly President
Bristol Bay Borough
Naknek, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
JOE BERESKIN, Mayor
City of Akutan
Akutan, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
FRANK KELTY, Mayor
City of Unalaska
Unalaska, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
JORDAN KEELER, City Administrator
City of Sand Point
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
ALICE RUBY, Mayor
City of Dillingham
Dillingham, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
MATT ALWARD, President
United Fishermen of Alaska
Homer, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
JILA STUART, Finance Director
Haines Borough
Haines, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
LEE BURGESS, Finance Director
City & Borough of Wrangell
Wrangell, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
TERRY EUBANK, Finance Director
City of Kenai
Kenai, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
MARILYN MENISH-MEUCCI, representing self
Petersburg, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
GLORIANNE WOLLEN, representing self
Petersburg, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
JEFF GUARD, representing self
Cordova, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
JAMES WIESE, representing self
Cordova, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
STOSH ANDERSON, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
SHAWN DOCHTERMANN, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
DARIUS KASPRZAK, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
RACHEL LORD, representing self
Homer, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
JOHN MURRAY, representing self
Sitka, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
CATHY RENFELDT, representing self
Cordova, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
DUSTIN DICKERSON, Vice President
Unalaska Native Fisherman's Association
Unalaska, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
GERALD MCCUNE, Board President
Cordova District Fishermen United
Cordova, Alaska
POSITION STATEMENT: Testified in opposition to SB 63.
ACTION NARRATIVE
3:31:42 PM
CHAIR CLICK BISHOP called the Senate Community and Regional
Affairs Standing Committee meeting to order at 3:31 p.m. Present
at the call to order were Senators Gray-Jackson, Birch, and
Chair Bishop.
SB 63-FISH TAX: REPEAL MUNI REFUNDS/REV. SHARE
3:32:39 PM
CHAIR BISHOP announced the consideration of Senate Bill 63 (SB
63).
3:33:29 PM
BRUCE TANGEMAN, Commissioner, Alaska Department of Revenue,
Juneau, Alaska, detailed that the state currently shares 50
percent of the revenues collected from its two main fisheries
taxes with municipalities. The Fisheries Business Tax is shared
with municipalities where fisheries resources were processed,
and the Fishery Resource Landing Tax is shared with
municipalities where the fishery resources were brought to
shore. The revenues are shared each October and are based on
actual receipts from the previous calendar year. In FY2018, the
state shared approximately $29 million in revenues with
municipalities.
He explained that SB 63 would repeal the statutes that provide
for the fisheries tax revenue sharing. The policy rationale is
to identify statewide revenues currently being shared or
diverted in order to help balance the state budget. The loss of
shared revenue is somewhat offset by Governor Dunleavy's pledge
to share 50 percent of the alcohol tax revenues through the
Community Assistance Program, although the administration
recognizes that it is not a dollar-for-dollar offset.
He detailed that SB 63 repeals the 50 percent revenue sharing
from the Fisheries Business Tax, also known as the Raw Fish Tax,
collected from processors and people who export unprocessed
fishery resources from Alaska. The bill also repeals the Fishery
Resource Landing Tax levied on fishery resources landed in
Alaska and processed outside the state. The fisheries taxes
relate to processing activities within and outside of an
incorporated city or organized borough. Language in the bill
states that the legislation is retroactive to January 1, 2019.
Consequently, the fisheries taxes will not be shared with
municipalities starting in October 2019 even though the taxable
even occurred in 2018.
3:35:40 PM
COMMISSIONER TANGEMAN explained that the Fisheries Business Tax
dates to 1899, before Alaska was a territory. The tax was first
shared with municipalities at 10 percent of total revenue in
1962, raised to 20 percent in 1979, and then raised again to the
current 50 percent in 1981. Sharing with the unorganized borough
was authorized in 1990. The Fishery Resource Landing Tax dates
to 1994. The legislature restructured the tax in 1996 to mirror
the Fisheries Business Tax program. Sharing was part of the
program from the beginning.
SENATOR BIRCH asked if local communities will be allowed to
raise an equivalent tax to offset whatever diminishment results
from SB 63.
3:38:07 PM
BRANDON SPANOS, Deputy Director, Tax Division, Alaska Department
of Revenue, Anchorage, Alaska, answered that there is no
statutory provision that would preclude a municipality from
having a fish tax.
SENATOR GRAY-JACKSON disclosed that she was the finance manager
for Akutan and noted that approximately 95 percent of revenues
for their budget come from the fish tax. She asked what amount
Akutan would receive in substituted revenue from the alcohol
tax.
COMMISSIONER TANGEMAN specified that the portion of the 50
percent alcohol tax is not part of SB 63; it is a separate piece
of legislation. He offered to follow up with additional
information.
SENATOR GRAY-JACKSON replied that she would appreciate receiving
the information.
CHAIR BISHOP asked for the sectional analysis overview of SB 63.
MR. SPANOS reviewed the sectional analysis for SB 63 reading
from the following prepared document:
Section 1 would amend AS 29.60.800(a), relating to the
harbor facility grant fund, to conform to the repeal
later in the bill of the statute providing for refunds
to municipalities from the fisheries business taxes.
Section 2 would amend AS 29.60.810, relating to grant
applications for harbor facilities, to conform to the
repeals later in the bill of the statutes providing
for the allocations and the refunds to municipalities
of fisheries business taxes.
Section 3 would amend AS 43.77.015(b), related to
payments under a fishery cooperative contract, to
conform to the repeal later in the bill of the statute
providing for revenue sharing to municipalities from
the fishery resource landing tax.
Section 4 would amend AS 43.77.050(b), relating to
separate accounting for fishery resource landing tax
revenues, to conform to the repeal later in the bill
of the statute providing for revenue sharing to
municipalities from the fishery resource landing tax.
Section 5 of the bill would repeal the following
statutes:
1) AS 29.60.450, relating to allocations to
municipalities of revenues from the refunds for
fisheries business taxes and the revenue sharing from
the fishery resource landing tax;
2) AS 43.75.130, relating to refunds to municipalities
from the fisheries business taxes;
3) AS 43.75.133, relating to the provision of
information to municipalities regarding the fisheries
business taxes;
4) AS 43.75.137, relating to additional refunds to
municipalities from the fisheries business taxes; and
5) AS 43.77.060, relating revenue sharing of fishery
resource tax with municipalities.
Sections 6 through 9 of the bill make conforming
amendments to delayed repeal provisions in existing
law.
Section 10 of the bill clarifies the applicability of
the changes in sections 1 through 5 of the bill.
Sections 11 and 12 of the bill provide the Department
of Revenue with flexibility in timing to adopt or
repeal any regulations necessary to conform to the
changes in the bill.
Section 13 of the bill provides for retroactive
application of bill sections 1-5 to January 1, 2019.
Sections 14 - 18 provide effective dates. Most
sections of the bill have an immediate effective date.
Sections 6, 8, and 9 are amendments to delayed repeals
in existing law with effective dates that match the
effective dates in existing law.
3:42:54 PM
SENATOR BIRCH asked what the net difference is between the
alcohol tax revenue and the fish tax revenue.
MR. SPANOS answered that the fiscal note shows the half that
will not be shared if the bill were to pass amounts to
approximately $30 million. The total alcohol tax number in 2018
was roughly $40 million.
SENATOR BIRCH offered his understanding that the alcohol tax is
then going to be split to replace, in part, the fisheries tax
distribution.
MR. SPANOS clarified that the alcohol tax is a separate bill.
The governor wishes to share half of the alcohol tax to offset
the other reductions. He advised that the alcohol tax would not
be a dollar-for-dollar replacement for each community. He
explained that the fishery tax is dependent on where the fish
was landed, processed, or exported from and the alcohol tax
would be shared differently.
3:45:21 PM
CHAIR BISHOP asked if there have been communications with the
impacted communities pertaining to SB 63.
COMMISSIONER TANGEMAN answered that he has not communicated with
the communities and he is not sure what communications have
taken place from the governor's office.
CHAIR BISHOP asked the committee aide to make a note to reach
out to the governor's office to ask that question.
He asked if SB 63 is a priority for the administration.
COMMISSIONER TANGEMAN confirmed it is a priority. It is one of
several bills intended to bring all revenue streams together and
then be distributed to benefit all Alaskans statewide. The
consolidation will allow the state to know what is available for
statewide spending.
3:47:12 PM
CHAIR BISHOP asked what sort of analysis has been done of the
secondary and tertiary impacts that would occur by taking money
out of these municipalities.
COMMISSIONER TANGEMAN answered that he was not aware of any
analysis.
MR. SPANOS added that the Tax Division has not done an analysis.
CHAIR BISHOP referenced a Senate Finance Committee meeting in
January where Senator Hoffman asked Office of Management and
Budget (OMB) Director Arduin if education appropriations for
FY2019 and FY2020 will be implemented if the law isn't changed
and Director Arduin responded "yes." He asked Commissioner
Tangeman if he recalled the conversation.
COMMISSIONER TANGEMAN answered no; he did not attend the
meeting.
SENATOR GRAY-JACKSON asked him to confirm that an economic
analysis of the communities affected by SB 63 was not done.
COMMISSIONER TANGEMAN answered correct.
3:49:41 PM
At ease.
3:50:31 PM
CHAIR BISHOP called the committee back to order. He announced
that the committee would hear invited testimony.
3:50:53 PM
NILS ANDREASSEN, Executive Director, Alaska Municipal League
(AML), Juneau, Alaska, stated that AML's presentation will show
that the fisheries taxes affect all Alaska communities. He
emphasized that AML is not interested in dividing its approach
for addressing the budget on the backs of different areas of the
state. He opined that care must be taken in targeting coastal
communities where the state has such strong fisheries and
economic activity. The presentation does include OMB's
principles, "sustainable, predictable, and affordable," because
that is what shared fisheries taxes achieve in Alaska
communities.
He detailed that AML represents 165 cities and boroughs. Those
affected by the fisheries taxes are roughly one-third of all
local governments in Alaska. Every Senate district is affected
to varying degrees, but the AML overview will focus on the
cities and boroughs that are most significantly affected by SB
63.
3:52:24 PM
He referenced "Shared Fish Taxes, Sustainable Communities" as
follows:
• Used by municipalities to:
o Operate/maintain ports and harbors.
o Provide local contribution to education.
o Support public safety and municipal-owned hospitals.
o Maintain public works such as water, sewer,
sanitation, solid waste.
o Replace gaps in State capital investment.
o Provide grants to local nonprofits and youth
activities.
o Offer quality of life programs:
square4 Pools,
square4 Libraries,
square4 Parks.
o Improve credit ratings.
MR. ANDREASSEN summarized that the shared fish taxes are used to
ensure sustainable communities where the revenue contributes to
general funds; helps support education, hospitals, solid waste,
and public works; replaces gaps in state capital investment
which has declined over these last few years; provides grants to
local nonprofits; and ensures quality of life programs in those
communities for residents. He noted that the taxes are also used
to operate and maintain ports and harbors, many were transferred
in neglect from the state to municipalities many years ago.
He referenced "Municipal Impact: Hardest Hit Total Dollars" as
follows:
• City of Dillingham:
o 2018 Total: $443,905;
o Tax Revenue: 8.04 percent.
• City & Borough of Juneau:
o 2018 Total: $447,875;
o Tax Revenue: 0.43 percent.
• City of Seward:
o 2018 Total: $456,144;
o Tax Revenue: 6.61 percent.
• City of Valdez:
o 2018 Total: $512,449;
o Tax Revenue: 1.16 percent.
• City of King Cove:
o 2018 Total: $564,174;
o Tax Revenue: 33.04 percent.
• City of Saint Paul:
o 2018 Total: $623,979;
o Tax Revenue: 30.62 percent.
• Kenai Peninsula Borough:
o 2018 Total: $860,097;
o Tax Revenue: 0.85 percent.
• City of Kodiak:
o 2018 Total: $880,642;
o Tax Revenue: 6.67 percent.
• City of Akutan:
o 2018 Total: $999,031;
o Tax Revenue: $29.94 percent.
• City & Borough of Sitka:
o 2018 Total: $1,279.885;
o Tax Revenue: 6.55 percent.
• City of Cordova:
o 2018 Total: $1,429,951;
o Tax Revenue: 24.03 percent.
• Aleutians East Borough:
o 2018 Total: $1,887,896;
o Tax Revenue: 38.13 percent.
• Kodiak Island Borough:
o 2018 Total: $1,919,461;
o Tax Revenue: 10.39 percent.
• Bristol Bay Borough:
o 2018 Total: $3,820,480;
o Tax Revenue: 57.79 percent.
• City of Unalaska:
o 2018 Total: $8,162,129;
o Tax Revenue: 37.21 percent.
MR. ANDREASSEN stated that the hardest hit list focuses on 15
impacted communities that range from almost $500,000 to more
than $8 million. The revenue from the taxes are essential to
maximizing self-government which is a constitutional mandate.
He referenced "Municipal Impact: Hardest Hit Tax Revenue
Percentage" as follows:
• City of Atka:
o 2018 Total: $11,318;
o Tax Revenue: 22.00 percent.
• City of Adak:
o 2018 Total: $195,387;
o Tax Revenue: 23.16 percent.
• City of Emmonak:
o 2018 Total: $61,167;
o Tax Revenue: 23.74 percent.
• City of Cordova:
o 2018 Total: $1,429,951;
o Tax Revenue: 24.03 percent.
• City of Akutan:
o 2018 Total: $999,031.
o Tax Revenue: 29.94 percent
• City of Saint Paul:
o 2018 Total: $623,979;
o Tax Revenue: 30.62 percent.
• City of King Cove:
o 2018 Total: $564,174;
o Tax Revenue: 33.04 percent.
• City of Unalaska:
o 2018 Total: $8,162,129;
o Tax Revenue: 37.21 percent.
• Aleutians East Borough:
o 2018 Total: $1,887,896;
o Tax Revenue: 38.13 percent.
• City of False Pass:
o 2018 Total: $51,588;
o Tax Revenue: 41.95 percent.
• Bristol Bay Borough:
o 2018 Total: $3,820,480;
o Tax Revenue: 57.79 percent.
• City of Togiak:
o 2018 Total: $165,013;
o Tax Revenue: 107.03 percent.
• City of Chignik:
o 2018 Total: $98,919;
o Tax Revenue: 178.38 percent.
• City of Larsen Bay:
o 2018 Total: $155,056;
o Tax Revenue: 303.81 percent.
MR. ANDREASSEN said a second way to look at the proposed
legislation is by impacts as a percentage of tax revenue. The
proposed legislation could mean as much as a 300 percent impact
to some communities. The tax percentage listing shows 15
municipalities that would experience at least a 20 percent
reduction in their overall tax revenue.
He noted that Senator Birch inquired about the possibility of a
municipality implementing a tax at the local level. He opined
that the state preemption of the shared fish taxes might result
in additional taxes on one of Alaska's strongest industries and
largest employers.
3:54:42 PM
He referenced "Total Impact" as follows
• Top 37 = $27,920,880
o Representing 186,739 Alaskans, not including Anchorage
equals 25 percent of state.
• Average impact:
o $615,845.
• Average fish tax impact as percentage of tax revenue:
o 29.82 percent.
• Top 10 characteristics:
o Total population: 97,908;
o Total employees: 929;
o Bond debt: $455,300,666;
o School bond debt: $131,489,219;
o Combined contribution to school districts:
$72,033,407;
o Hospitals: 3;
o Police powers: 6;
o 100-percent PERS;
o 7/Property tax;
o 6/Sales tax.
MR. ANDREASSEN said that the total impact for the Top 37 lists
municipalities that would be most significantly affected by the
proposed legislation. The cumulative amount would be
approximately $27 million, representing 25 percent of the state
if Anchorage, which receives $51,000 from the shared taxes, was
taken out. The average impact for the Top 37 communities is
$615,000 and the average impact as a percentage of tax revenue
is just under 30 percent.
He emphasized that the Top 37" as strong communities where the
top ten account for 100,000 in population, have a 100 percent
participation in the state pension program, service almost 1,000
employees between them, have property taxes, and some have sales
taxes. Some of the Top 37 impacted municipalities have the
option of implementing a tax and some would struggle.
He explained that a local tax is on local activity, the sharing
is from local to state, not vice versa. The impacted communities
carry bond debt and rely on the shared tax revenues to ensure
their debt obligations are made. The communities that contribute
to school districts do so in the amount of $72 million. Many
communities have municipal hospitals and local law enforcement.
3:56:09 PM
SENATOR BIRCH asked how the tax dollars are collected and
distributed.
MR. ANDREASSEN answered that he does not have a clear answer but
will get back to the committee.
CHAIR BISHOP said Commissioner Tangeman will probably be able to
answer the question.
MR. ANDREASSEN referenced "Total Impact by Senate District" as
follows:
• District E:
o Total fish: $546,938.
• District F-N:
o Total fish: $53,269.
• District O:
o Total fish: $1,442,426.
• District P:
o Total fish: $5,588,775.
• District Q:
o Total fish: $800,759.
• District R:
o Total fish: $2,600,153.
• District S:
o Total fish: $17,687,490.
• District T:
o Total fish: $61,167.
He pointed out that the data on total impact by Senate district
clearly shows that the repeal or defunding of the shared
fisheries taxes has a significant impact.
3:57:05 PM
He addressed "Scenario Development: Shared Fish Taxes" as
follows:
• Taxes and or moorage fees increase:
o Seafood prices remain low or flat.
o Small vessels and business owners become unviable.
o Sell-off of local, small vessels to larger fleets.
o Fleet consolidation benefits accrue to outside owners.
• Maintenance and repair of ports and harbors diminished:
o State-transferred assets increasingly unable to serve
seafood or tourist industry.
• Additional taxes considered, where none exist:
o Duplicate industry taxing and decreased economic
growth.
He summarized that additional taxes would have to be considered
where none exist, and you end up with duplicate industry taxing
and decreased economic growth.
3:58:10 PM
MR. ANDREASSEN referenced scenario development for the City of
Kodiak, City of Dillingham, City of Kenai, City of Atka,
Petersburg Borough, City of St. Paul, City & Borough of Yakutat,
and City of Seldovia as follows:
• City of Kodiak:
o The combined reductions and cost-shifting will mean
that the City of Kodiak anticipates:
square4 Potential staff reductions: 13 of 133;
square4 Public Safety budget reduced by 8 percent;
square4 Public Works budget reduced by 8 percent;
square4 Harbor budget reduced by one full-time equivalent
(FTE):
• Lack of need for officers at Alaska Marine
Highway System (AMHS) Terminal.
• $50,000 loss of revenue at Pier I and II.
square4 Quality of Life programs potentially eliminated
include the Kodiak Public Library and Parks and
Recreation programs.
o Taxes would need to increase to offset the decisions
from SB 63.
o The City of Kodiak underwent a strenuous evaluation of
sales tax during the 2016-2018 fiscal years:
square4 The sales tax cap was increased.
square4 Future adjustments to sales tax would include
taxing internet sales, eliminating exemption
programs, and compliance audits.
square4 Other adjustments to sales tax would come as cuts
of City services to residents.
• City of Dillingham:
o Receives Shared Fisheries Business Tax of $398,350 in
FY2019.
o Despite an almost nine-year effort, the Local Boundary
Commission denied the city's efforts to expand its
municipal boundaries in order to levy a local
fisheries tax.
o While the city is a major commercial fishing
community, the does not have the resources to make up
the loss of state shared fish tax revenue.
o Reduction in state revenue will significantly impact
the city's overall ability to continue to provide
services:
square4 Up to 25-percent staff reductions.
square4 Significant reduction in services in all or most
departments/services.
square4 Tax increases:
• Mill rate and sales tax need to be explored.
o The tertiary impact will be a significant loss of jobs
and a loss of residents as people will move to seek
employment.
o Unknown where funding will come from to replace lost
shared revenues.
• City of Kenai:
o The combined reductions and cost-shifting will mean:
square4 Potential staff reductions:
• 6-7 fulltime positions.
square4 Public Safety budget reduction to be determined.
square4 Public Works budget reduction to be determined.
o Quality of Life programs potentially eliminated that
includes ski trails, outdoor ice skating, and possible
reduction in park maintenance and beautification.
o Taxes would need to increase by 0.63 mills to offset
SB 63.
• City of Atka:
o The combined reductions and cost-shifting will mean
that the City of Atka anticipates:
square4 Potential staff reductions = 4.
square4 Public Safety budget reduced by 100 percent. Atka
has a VPSO through the regional tribal entity but
provides about $6,000 in additional support from
City funds.
square4 Public Works budget reduced by 40 percent.
square4 The ability to comply with unfunded mandates
related to utility operations will be severely
hindered.
square4 The City will not be able to adequately maintain
and operate public facilities or provide public
services.
o Job opportunities in Atka are limited at present. Low
income residents cannot afford additional costs that
would be necessary to cover increases in charges that
would be needed to continue operation of public
utilities and services:
square4 The tax base in Atka is severely limited. Even if
the local population were to agree to tax
themselves, this would not bring in enough to
cover even the cost of implementing and managing
tax collection.
• Petersburg Borough:
o The combined reductions and cost-shifting will mean
that the Petersburg Borough anticipates:
square4 Property Taxes would need to increase by 1.7
mills in service Area 1 to offset the elimination
of the State school bond debt reimbursement.
o The current property tax levy for Education of 4.35
mills would need to double to make up the lost funding
from the State. Due to the Borough's tax cap of 10
this would not be possible as we are already at 9.25
for school and general services. This would mean
drastic cuts to our school and local government,
including:
square4 Quality of Life programs potentially eliminated
including our community aquatic center, reduced
hours to the library and to our Parks &
Recreation Department.
square4 Loss of School Activities (sports, music, etc.),
and increase in classroom sizes.
square4 Reduction of staff Borough wide (Borough, School
and Hospital).
square4 Major rate increase for Harbor moorage and its
resulting impact on the economic engine of the
Borough.
• City of St. Paul:
o The combined reductions and cost-shifting will mean
that the City of Saint Paul anticipates:
square4 Potential staff reductions of 3 to 4 fulltime
positions with a reduced work week from 40 hours
per week to 35 hour per week.
square4 Public Safety budget reduced by 7 percent.
square4 Public Works budget reduced by 19 percent.
square4 Travel and training budgets reduced by 90
percent.
square4 General fund capital improvement budget reduced
by 100 percent.
square4 Local sales tax would need to increase by 90 to
95 percent to offset these decisions.
square4 An increase in utility (electric, water, sewer,
and refuse) rates to cover the administrative
costs for operation of these utilities.
• City and Borough of Yakutat:
o Impacts based on the proposed FY2020 budget: we have
highlighted below some of the impacts that this
proposal will have on our residents.
square4 Community Assistance funding has been $310,615.28
and is 10 percent of the budget.
square4 Current local contribution to education is the
maximum amount allowed of $503,849.
square4 Residents depend on $351,731.65 in PCE funding to
afford high energy costs.
square4 Share of the Shared Fisheries Business Tax is
$218,773 and the share of the Fish Landing Tax is
$39,078.
square4 Anticipated cuts to the school district are
$252,220.
square4 Senior Services cuts are expected of $100,000.
o Yakutat is concerned about the long-term
sustainability of Community Assistance and PCE.
o Anticipated combined reductions and cost shifting:
square4 Potential staff reductions:
• 3 of 17 or 17 percent reduction in staff.
square4 Public Safety budget reduced by 20 percent.
square4 Public Works budget reduced by 20 percent.
square4 Taxes would need to be increased by 300 percent.
• City of Seldovia:
o Share of the Shared Fisheries Business Tax in FY2019
is $2,341:
square4 Funds are invested directly into the city's fish
dock to support its commercial fishing industry.
o The combined reductions and cost shifting will mean
that the City of Seldovia anticipates:
square4 Potential staff reductions:
• Two Full-Time Equivalents (FTE);
• Less workforce equals less services.
square4 Public Safety budget reduced by 13 percent.
square4 Public Works budget reduced by 13 percent.
square4 Reductions in staffing would lead to potential
deficiencies in health and welfare, including
monitoring our water utility and preservation of
the city's safe working environment.
square4 Important significant programs potentially
eliminated include Seldovia Senior Meal Program,
quality of life to Medicaid recipients, Parks and
Recreation, and overall quality of life for
Seldovians and visitors alike.
4:00:54 PM
MR. ANDREASSEN addressed "Choices Combined: Micro Implications"
and first addressed matters that compound the situation:
• Capital Project Reimbursement:
o $32,450,199;
o FY2020:
square4 $2,003,484.
• Harbor Matching Grants:
o $7,500,000.
• Alaska Marine Highway System:
o $8,709,307.
MR. ANDREASSEN addressed the micro implications of defunding
that act like a feedback loop that includes:
• Decreased economic growth,
• Departure of residents,
• Departure of businesses,
• Fewer jobs in private and public sector,
• Decrease in taxability,
• Decrease in local required school contribution,
• Quality of schools decrease,
• Departure of families,
• Industry invests elsewhere.
He explained that the previously noted municipal impact
statements include things that compound the situation like the
Capital Project Reimbursement, the Harbor Matching Grants, and
loss of the Alaska Marine Highway System. But the fish taxes
repeal would be tough to manage at a local level as noted in the
feedback loop where the departure of residents means the
departure of businesses, decreased taxability, and its knock-on
effect for other factors.
He said the outcomes from the passage of SB 63 will lead to the
following:
• Less sustainable communities.
• Less predictable economies.
• Less affordable services.
4:02:52 PM
CHAIR BISHOP announced that the committee will hear invited
testimony.
4:02:58 PM
JON ERICKSON, Manager, City & Borough of Yakutat, Yakutat,
Alaska, testified in opposition to SB 63. He said he supports
the commitment to having a sustainable budget, but not by making
Yakutat unsustainable. The fish tax money has been used to
repair and upgrade the fish plant dock so there is a place in
Yakutat for commercial fishermen to sell their fish.
He opined that the recipe to kill the economy in Yakutat and
Southeast Alaska is to take away the fish tax, weaken Power Cost
Equalization (PCE), cut contributions to education, stop ferry
service, take away Medicaid funds for a new clinic, take away
revenue sharing, and cause the City and Borough of Yakutat to
raise property taxes and sales taxes. He asked what part of
shutting down rural Alaska equates to "Alaska is open for
business."
4:05:56 PM
CHAIR BISHOP asked him to confirm that the City and Borough of
Yakutat uses its fish tax funds to keep its dock up and running.
MR. ERICKSON answered yes; the city and borough inherited the
dilapidated dock in 1972 and has used the fish tax and money
from various companies that rent it to repair and run the dock.
SENATOR GRAY-JACKSON said she agrees with Mr. Erickson's
comments.
4:07:19 PM
LAYTON LOCKETT, City Manager, City of Adak, Adak, Alaska,
testified in opposition to SB 63. He explained that Adak derives
the majority of its revenue through taxation of the fishing
industry. Thirty-four percent of the operating revenues to date
are derived from the tax. Adak is a former naval facility that
was never platted or subdivided upon its transfer and the city's
ability to institute a property tax would require a significant
amount of capital and effort. Therefore, the city's ability to
generate revenue must continue to come from the levy of taxes
such as sales and local fish taxes. In order to replace the
equivalent amount of revenue would require a 200 percent
increase in the city sales tax or a budget cut of 33 to 51
percent, which would decimate city services.
4:10:48 PM
PHIL ZAVADIL, City Manager, City of St. Paul, St. Paul, Alaska,
testified in opposition to SB 63. He said the fish taxes makes
up one-third of St. Paul's total general fund operating budget.
These funds go directly to providing public safety and public
work services to residents. He detailed the history of how the
state supported Saint Paul and the Pribilof Islands in creating
a stable, fisheries-based economy. He said SB 63 sends a message
that the state will no longer support its commitment to the
community and value people. SB 63 will threaten the long-term
stability and sustainability of significant investments the
state and local entities made into the St. Paul harbor. SB 63
will impair St. Paul's ability to pay back the loans that the
city had to take to pay for its share of the harbor and other
local infrastructure. Over $100 million in state, federal, and
local funds was invested into the St. Paul harbor infrastructure
alone. Thanks to the harbor, St. Paul remains as one of the top
generators statewide of fisheries business taxes.
4:14:15 PM
PAT BRANSON, Mayor, City of Kodiak, Kodiak, Alaska, testified in
opposition to SB 63. He said the City of Kodiak faces a dire
threat from the governor's proposed budget that takes the shared
Fisheries Business Tax and shared Fishery Resource Landing Tax.
The taxes amount to $859,000 to the City of Kodiak budget, or
4.5 percent of the general fund revenue. The funds are used to
maintain infrastructure, which supports Kodiak's and the state's
economic engine, the seafood industry. Kodiak is the third
ranked community in pounds landed, and fourth in product value
in all U.S. ports for the fisheries economy. The state no longer
owns the infrastructure in Kodiak, an infrastructure that
supports an important industry. Without the tax funds
municipalities will have to look at raising taxes, cutting
services, and for some communities to even continue as viable
government entities. She summarized that cost shifting and
revenue grabbing is not budget solving.
4:16:55 PM
ANNE BAILEY, Administrator, Aleutians East Borough, Anchorage,
Alaska, testified in opposition to SB 63. She detailed that the
Aleutians East Borough is responsible for 3,141 residents
located in the following communities: Akutan, Cold Bay, False
Pass, King Cove, Nelson Lagoon and Sand Point. She said the
shared fisheries taxes is a partnership between the state and
municipalities. There are significant general fund revenues that
the municipalities rely on as part of their tax base that
supports services and capital projects. The shared fisheries
taxes program represents 28 percent of the borough's operating
budget of approximately $2.2 million.
4:19:42 PM
GARY HENNIGH, City Administrator, City of King Cove, Anchorage,
Alaska, testified in opposition to SB 63. He said fisheries
represent the revenue cornerstone of the King Cove economy. The
prospects of SB 63 becoming law is the most daunting of any
fishing-related changes during his 29 years as city
administrator. Since King Cove became a first class city in the
mid-1970s, state shared fish taxes have been 20 to 25 percent of
the their budget. Currently it is approximately $580,000 of a
$2.5 million general fund budget. He concluded that SB 63
threatens the long-term survival of King Cove.
4:22:56 PM
CLAY KOPLIN, Mayor, City of Cordova, Cordova, Alaska, testified
in opposition to SB 63. He said Cordova has already reduced its
budget from $12 million to $10 million in the wake of economic
contraction. Taking $1.2 million in fish taxes from Cordova
will not allow the city to invest in a growing fishery. Cordova
ranks as the thirteenth largest seafood port in the United
States. It is nearly a $100 million economy and the city is on
track to be in the top five seafood ports. The state made a
partnership with the community via the fish tax revenues.
Cordova is on a growth trajectory and taking away the tax will
put the city in a survival mode. He opined that this proposal
basically says Alaska is open for business as long as you don't
live here. He said if the state is the only beneficiary of these
local taxes, it removes the incentive to make the local
investments that have grown the tax revenues. The possible
result in five years is floating processors that ultimately
generate less revenue for the state.
4:26:56 PM
MARY SWAIN, Assembly President, Bristol Bay Borough, Naknek,
Alaska, testified in opposition to SB 63. She said the borough
is the heart of the largest red salmon fishing industry in the
world with an estimated annual value of $1 billion. The Naknek
port is the third largest commercial landing port in the United
States, based on commercial fishing landings ranked by dollar
value. The tax revenue supports the borough's essential
services. The borough and the state have had a 57 year history
of supporting the $1 billion Bristol Bay fishing industry and
the borough hopes that will continue.
4:30:16 PM
JOE BERESKIN, Mayor, City of Akutan, Akutan, Alaska, testified
in opposition to SB 63. He said the shared fishing taxes
accounted for 38 percent of the city's revenues in 2018.
Combined with the city's other revenues this accounts for 88
percent of the city's revenues. The shared fishing taxes has
allowed Akutan to develop projects completely paid for with city
funds. The taxes have also supported the city's essential
services and capital projects. The shared fishing taxes is
essential for the city to meet its goals as well as allowing the
city to step up as a partner with the state.
SENATOR GRAY-JACKSON noted that she had worked for Mayor
Bereskin in Akutan and thanked him for his testimony.
4:34:42 PM
FRANK KELTY, Mayor, City of Unalaska, Unalaska, Alaska,
testified in opposition to SB 63. He pointed out that the City
of Unalaska has been the number-one commercial fishing port in
the nation for 22 years and is highly dependent on the shared
and local landing taxes. The fisheries industry in the Bering
Sea is Unalaska's only industry and if the fish tax revenues are
impacted the result will be felt in all city sectors. Unalaska's
shared fish taxes account for 26 percent of the its $31 million
general fund revenues. Unalaska provides services to help
support the nation's largest commercial fishing port that
supports harvesters and processors. Unalaska has heavily
invested in the infrastructure that supports the fishermen,
processors, essential services, nonprofit services, and capital
projects. With the lack of state capital project funds, many
communities have taken over formally funded state services.
Unalaska's fish taxes allow the city to pay its own way.
He summarized that the governor has repeatedly stated he will
not implement a tax on the people. By taking dollars from
communities that service industries on a local level, the impact
will require higher taxes imposed by municipalities. He opined
that the administration is forcing local governments to tax the
people of Alaska and the bill will impact the quality of life
for all Alaskans.
4:38:29 PM
CHAIR BISHOP asked how the city will deal with the impact of
receiving the additional 20 cruise ships that are anticipated.
MAYOR KELTY replied that cruise ship visits are part of
Unalaska's recent $40 million dock expansion. He detailed that
the expanded dock has room for two container ships or up to two
cruise ships. He noted that Unalaska annually ships over a
billion pounds of seafood out of its port and the city must take
care of its facilities on its own.
SENATOR BIRCH asked how taxes are collected.
MAYOR KELTY answered that the three percent Alaska Fisheries
Business Tax is paid to the state by the processors based on
shore and half is returned to the communities. The three percent
Fishery Resource Landing Tax makes an equal playing field
between the shore-based and off-shore processing fleet. The
landing tax is based on where the finished product is landed
because the processing occurs in federal waters. The majority of
the landing taxes go to Unalaska because the city has the only
major shipping port in the Aleutians.
4:41:21 PM
JORDAN KEELER, City Administrator, City of Sand Point,
Anchorage, Alaska, testified in opposition to SB 63. He
explained that the fisheries tax comprises 15 to 20 percent of
Sand Point's general fund over the past decade. The shared fish
taxes are used for administrative costs, core services,
enterprise funds, and debt service obligations. SB 63 will have
a serious impact on Sand Point and its ability to serve its
residents.
4:43:14 PM
ALICE RUBY, Mayor, City of Dillingham, Dillingham, Alaska,
testified in opposition to SB 63. She said Dillingham is a
small, first-class city in Bristol Bay that is located among the
communities in the middle of the Bristol Bay commercial salmon
fishery. Dillingham is the economic transportation and public
service center for western Bristol Bay. Dillingham's fishing
industry contributes a great deal to both its own community and
to the state since over 40 percent of the permits that
participate in the fishery are owned by residents from outside
of the region but located within the state. Part of Dillingham's
success is due city support of the infrastructure that the
industry and community needs. Dillingham currently receives
$398,000 in shared fish tax revenue, which is critical to the
community. The fish tax revenue accounts for one third of the
school contribution, one quarter of the public safety budget,
and half of the public works budget. The city cannot levy its
own fish tax because the local boundary commission has denied
the city's nine-year effort to expand its boundaries for levying
a local fish tax. Dillingham taxes itself heavily and its
ability to generate more tax revenue to make up for its loss
from SB 63 is limited if not impossible. Dillingham's only
alternative to make up for its loss would be to reduce essential
services. The loss from SB 63 will impact Dillingham's ability
to support the fishing industry, the very industry that is
generating the economic benefit for both the state and
Dillingham.
4:47:04 PM
MATT ALWARD, President, United Fishermen of Alaska, Homer,
Alaska, testified in opposition to SB 63. He said the
legislature chose a long time ago to share a portion of the
fisheries taxes with the communities that the fishing industry
relies on for processing and shore-side services. The
communities use the funds to support the fishing industry as
well as paying for its basic services. Communities will have no
choice but to backfill funds or cut services if the shared taxes
are removed. If SB 63 passes, some of the fishing industry's
financial burden will be transferred to coastal communities
which will result in more financial stresses for commercial
fishing operations.
4:48:41 PM
JILA STUART, Finance Director, Haines Borough, Haines, Alaska,
testified in opposition to SB 63. She said she shares the
concerns that were voiced by the coastal communities that
support the fishing industry. The Haines Borough receives the
Fisheries Business Tax which accounts for 3 to 10 percent of
their general fund revenues. These are funds that the borough
tries to use for infrastructure to support the fishing industry
as well as supporting schools in Haines.
4:50:02 PM
LEE BURGESS, Finance Director, City & Borough of Wrangell,
Wrangell, Alaska, testified in opposition to SB 63. He explained
that Wrangell uses its share of the fish taxes to reinvest in
its harbor infrastructure. To make up for the loss of revenue
from SB 63, Wrangell will have to increase its moorage rates by
43 to 57 percent.
He opined that the effects of SB 63 will be extremely variable
depending on the community and would in effect be an example of
arbitrarily picking winners and losers by causing
disproportionate harm to certain communities relative to how
much their economic backbone is made up of commercial fishing.
4:51:40 PM
TERRY EUBANK, Finance Director, City of Kenai, Kenai, Alaska,
testified in opposition to SB 63. He said SB 63 is a bill that
will eliminate the current sharing of tax revenue to
municipalities that are providing direct assistance and
infrastructure to the processors and fishermen who are operating
within municipal boundaries.
MR. EUBANK explained that while small in comparison to many
communities, the City of Kenai receives between $125,000 to
$225,000 per year in shared fisheries business and resource
landing taxes. These shared taxes allow the city to provide
services and infrastructure directly to the processors and
fishermen in Kenai. Loss of the shared tax revenues will result
in a shift of the taxes to other non-fishing related taxpayers.
The proposed bill does not eliminate the need for revenue at the
local level but shifts the tax burden to other taxpaying groups.
4:53:07 PM
MARILYN MENISH-MEUCCI, representing self, Petersburg, Alaska,
testified in opposition to SB 63. She opined that the fisheries
business fish tax needs to stay in the communities that
generated the tax. Petersburg received $899,855 in 2018 and the
revenue was used for the harbors and the other needs of the
community. She suggested that the governor find alternative
revenue sources.
4:53:55 PM
CHAIR BISHOP opened public testimony.
4:54:07 PM
GLORIANNE WOLLEN, representing self, Petersburg, Alaska,
testified in opposition to SB 63. She noted that she is the
harbormaster in Petersburg. She detailed her fishing and
crabbing history. She said repealing the shared fish taxes would
devastate coastal communities that rely on the program to
support infrastructure and quality of life programs. She
addressed the history of the shared taxes and explained that
because the fishing industry gets the opportunity to harvest
seafood, the industry owes it to the state and communities to
share in the bounty. The concept is that "we are all in this
together" and the state government had faith in the industry by
providing enough tools to better care for itself. She said the
fishing industry is proud of the partnerships created amongst
the fishing fleet, the state, and the communities where the
seafood is landed.
4:57:10 PM
JEFF GUARD, representing self, Cordova, Alaska, testified in
opposition to SB 63. He opined that legislators took oaths to
"serve and defend the State of Alaska." He said coastal
communities are starting to feel under attack after watching the
proposals for the state ferry system, the shared Raw Fish Tax
revenue, and school dollars. He asked the legislature to use the
power of the purse to defend coastal communities from the
administration's proposed budget cuts.
4:58:25 PM
JAMES WIESE, representing self, Cordova, Alaska, testified in
opposition to SB 63. He noted that the shared fishery taxes are
used to support Cordova's infrastructure, city services, and
bond debt. He concluded that this repeal cannot be managed at
the local level.
5:00:27 PM
STOSH ANDERSON, representing self, Kodiak, Alaska, testified in
opposition to SB 63. He said he is a commercial fisherman who
has delivered fish in coastal communities that have all
benefited from the taxes that fishermen have paid. The taxes
collected and conveyed to the cities are appropriate and need to
be maintained. The proposed alcohol tax distribution as a
mitigation for reducing the sharing of the fish tax is not
appropriate. He opined that any distribution of the alcohol
taxes will not be proportional to the communities that have
received fish taxes.
5:02:15 PM
SHAWN DOCHTERMANN, representing self, Kodiak, Alaska, testified
in opposition to SB 63. He said he is a commercial fisherman and
delivers seafood to multiple coastal communities. He remarked
that he has great concern with the taking of the taxes that
helps provide for each port to keep its local infrastructure
healthy. He opined that the governor has no business in removing
the shared funds with the municipalities that receive seafood
landings. The economic stability of every coastal community and
borough is at stake if SB 63 were to pass. He suggested that the
governor consider other revenue sources.
5:03:52 PM
DARIUS KASPRZAK, representing self, Kodiak, Alaska, testified in
opposition to SB 63. He noted that he is a commercial fisherman
and opined that eliminating the shared taxes will accelerate
Kodiak's recent and consistent population decreases. He said as
the monies will necessarily be made up from new additional local
taxes, Kodiak is already one of the most expensive towns to live
in within the state. He remarked that SB 63 will disenfranchise
Kodiak.
CHAIR BISHOP said he would like to give a shout-out to all the
fishermen, men and women, who risk their lives every day to
provide a very sustainable industry for Alaska.
5:05:44 PM
RACHEL LORD, representing self, Homer, Alaska, testified in
opposition to SB 63. She detailed that she is a staff member for
the statewide Alaska Association of Harbormasters and Port
Administrators and sits on the Homer City Council. She said SB
63 is an irresponsible effort to balance the state finances on
the backs of municipalities and working waterfronts. The state's
harbors are set up as enterprise funds where harbors pay their
way including funding deprecation reserves through fees and
tariffs. Fish do not come across the dock unless docks are
maintained and properly managed. The shared fish tax revenues
are used to help recapitalize infrastructure and operate the
docks and harbors. She asserted that the Raw Fish Tax is not
statewide revenue. She opined that SB 63 would irresponsibly
pull revenue from the communities that are generating the tax
revenue and using it to maintain the infrastructure that
generates the revenue.
5:07:49 PM
JOHN MURRAY, representing self, Sitka, Alaska, testified in
opposition to SB 63. He detailed that he is a commercial
fisherman. He noted that Sitka is the largest small boat harbor
system in Alaska, both commercial and recreational. He opined
that Sitka would be hard pressed to backfill the loss of the
fish tax revenue. He asserted that SB 63 would be very
detrimental to the commercial fleet.
5:08:43 PM
CATHY RENFELDT, representing self, Cordova, Alaska, testified in
opposition to SB 63. She noted that she works for the Cordova
Chamber of Commerce. She said all Cordova businesses are opposed
to SB 63 and repealing the revenue sharing of fish taxes would
be extremely detrimental to city. The revenue from the fish
taxes represents 25 percent of the operating budget and cutting
the tax would likely result in cuts to Cordova's basic services.
The cuts in SB 63 are unrealistic and show a disregard for the
wellbeing of the state. The approach from SB 63 is shortsighted
and sends a clear message that the administration does not value
its coastal communities, which include six of the largest
seafood ports for landing value in the world. She said without
Alaska's coastal communities the state would lose an extremely
rare, wild, and intact ecosystems along with much of its
history, native culture, and unique character and charm.
5:10:56 PM
DUSTIN DICKERSON, Vice President, Unalaska Native Fisherman's
Association, Unalaska, Alaska, testified in opposition to SB 63.
He said he makes a hundred percent of his income from the fish
that he delivers on the dock. He stated that the Unalaska Native
Fisherman's Association does not support SB 63.
5:11:39 PM
GERALD MCCUNE, Board President, Cordova District Fishermen
United, Cordova, Alaska, testified in opposition to SB 63. He
explained that fishermen indirectly pay the tax and the tax is
included in the processors' business plans. He detailed that a
fisherman pays a 2-percent aquaculture tax and a 1-percent
marketing tax; to make up the money in the tax a fisherman would
have to pay 9 or 10 percent out of their own income to make up
for the loss. He asserted that if Cordova put in a 9-percent
"Raw Fish Tax" then plants in Valdez, Whittier and Seward would
attract fishermen away from Cordova. He opined that coastal
communities would probably lose money because less fish is
coming in which leads to less work and less product. He added
that Cordova's hospital is struggling and without a hospital the
U.S. Coast Guard would have to go to a location that has a
hospital facility.
5:13:32 PM
CHAIR BISHOP asked Commissioner Tangeman if he had closing
remarks.
COMMISSIONER TANGEMAN commented that he appreciates everyone's
concern and passion. He stated that the testifiers are obviously
seeing the possible impact from their backyards, from their own
communities along the coastline. He said his hope is everyone
can also appreciate the fact that the state is struggling with
the budget as well. He pointed out that the state has a $1.6
billion deficit and a budget that is unsustainable.
CHAIR BISHOP asked, if SB 63 did not pass, would the funds still
flow out from the state coffers to the communities as it has
been
COMMISSIONER TANGEMAN replied that the shared fish tax is the
law that is in place and the administration's intent is to
change the law through SB 63.
SENATOR GRAY-JACKSON thanked everyone for their comments and
noted how much she appreciated Commissioner Tangeman's comments
that the state is struggling. However, the administration should
not punish communities because the state is struggling; that is
not the way to handle the problem.
SENATOR BIRCH asked for the motivation behind allocating the
alcohol tax revenue as opposed to the fisheries tax to the
coastal communities.
COMMISSIONER TANGEMAN replied that he did not know what the
policy call was for the 50 percent distribution from the alcohol
tax. He reiterated that the alcohol tax is not connected to SB
63 and he cannot speak to the policy.
CHAIR BISHOP remarked that he thinks one of the commenters
summed it up best with the alcohol taxes, as much as they might
try to, he did not think they could drink enough to make up the
shortfall. He admitted that his remark is a bit of levity but
pointed out that the state is trying to go the other way by
using the alcohol funds to help people with drinking addiction
problems. He opined that the state needs to address alcohol
addiction on the front end and that is where that money needs to
go.
COMMISSIONER TANGEMAN referenced an earlier question and
explained that the fisheries taxes are administered and
collected at the state level and then distributed to the
communities.
5:17:04 PM
CHAIR BISHOP closed public testimony.
5:17:26 PM
CHAIR BISHOP held SB 63 in committee.
5:17:46 PM
There being no further business to come before the committee,
Chair Bishop adjourned the Senate Community and Regional Affairs
Standing Committee meeting at 5:17 p.m.