Monday, February 22, 2016

Royalty proposed on Alaska seafood catches

State Sen. Mike Dunleavy, R-Wasilla, today introduced Senate Bill 198 "establishing a 12.5 percent Alaska fisheries royalty on seafood caught commercially in the state."

FYI, the state collects a 12.5 percent royalty on many of its oil leases.

52 comments:

Anonymous said...

I really wish I would have sold out a couple years ago and gotten out of here.

Anonymous said...

If this passes it will make the $50 to $60 IFQ unaffordable.

Anonymous said...

Small independent fishing vessel owners and operators are at the mercy of many marketing and regulatory obstacles every year. With lower prices expected this year and fisherman cutting out only the absolute necessary expenses to operate, putting another 12.5% "ROYALTY TAX" on them would be undermining the operations and well being of the whole commercial fisheries.

How about assessing the value of every sport fish taken in the State of Alaska at fair market value and making that side of the coin pay for their share of the resource. Commercial fishermen provide a resource for those that cannot otherwise obtain it. Not just for a few that jam local airports with box after box of non revenue producing seafood.

Anonymous said...

Another Republican genius. We pay enhancement tax. License fees. Employ thousands of crew and now this Republic an moron proposes this

Anonymous said...

Bristol Bay rundown with this tax. 50 cents per pound

.50
- .02 Raw fish tax- 3%. BBRSDA- 1%
- .0625 New state tax-12.5%
.4175 41.75 cents per pound.

Base price at $1 = 83.5 cents per pound.

In any other business you would pass the tax along to the consumer yet we work with no collective bargaining and can't pass on any additional costs for we work for asshole fish company.

Anonymous said...

And Dunleavy cannot figure out why Big Oil has departed Alaska. Profit Margin is always confusing our school teachers, turned politicians. These same exact idiots also hold a few limited entry permits.

7:57, you forgot the city tax 7%+12.5%=19.5%, not including personal property tax. Why not just up it to an equal 20%, for the continual mathematical failure, now playing in Juneau for over 40 years.

You ought to read Dunleavy's "Redeployment Plan" for retired school teachers. SB 79? It's always the bottom of the class, that gets into teaching and politics.

"The only source of knowledge is experience."
Albert Einstein

All schools, all colleges, have two great functions: to confer, and to conceal, valuable knowledge. The theological knowledge which they conceal cannot justly be regarded as less valuable than that which they reveal. That is, when a man is buying a basket of strawberries it can profit him to know that the bottom half of it is rotten."
Mark Twain

"Three generations of imbeciles are enough."
Mr. Justice Oliver Wendell Holmes

https://www.alaskasenate.org/2016/files/2314/2738/8759/SB79_Sponsor_Statement.pdf

Anonymous said...

Republicans are going to take away all initiative to work.

Anonymous said...

So now the fishing industry is being asked to indirectly subsidize the oil industry. When the State of Alaska is awash in oil cash it doesn't save for market declines. Never mind the fact that it has been such a huge recipient of federal dollars. Piss poor planning.

Anonymous said...

7:57 PM Commercial harvesters have been snookered a long time by the processors. The tax should be on the exported value of seafood, not solely the ex-vessel value, on the backs of the folks who go out to catch the fish. You are the not the multinational corporation and should not bear the total burden of the tax.

Anonymous said...

I started fishing over 40 years ago, I somehow thought it was a get rich quick game, It certainly was not, and it ain't easy , the cost of moorage , fuel, storage, gear,maintenance other taxes, and crew is easily 60% of the gross often it can be a lot more, of the remaining 40% federal income tax plus self employment tax is at least 40%, leaving 22% of the gross, that is all if your boat is paid for as well as your permit , this and the fact that it is the most dangerous occupation is the reality of commercial fishing in Alaska, Now they want another 12.5%, it will put us out of the business we love as a way of life.
Perhaps the Gov. has been watching to many fishing discovery shows , like the one where they all made huge money when the were supposedly getting $2 per Bay., and announced their big paychecks, when reality was they got an embarrassing 50 cents per lb. less all the expenses listed above. Fishing has never been a rich mans game, there is no retirement, and it is a very hard way to make a living.

Anonymous said...

@1:20 pm. Fantastic idea. A few Reps were even talking about that at the last Fisheries Committee hearing. You should bring it up with whoever your Rep or Senator is. God help you if you live in the valley.

Anonymous said...

I think this is a terrible idea and we should do all we can to kill it in it's infancy.
But, I like the comment that if the commercial fishermen have to pay a royalty that the sport fishers should also pay. They are forever telling us how much each sport fish is worth. It always seemed to be a greatly inflated value. Let them pay a royalty on that value.

Tom Rollman said...

Wow... I think commercial fishermen are willing to pay their fair share, but 12.5%? Holy cow, that's a lot. It is frustrating to see all the out of state Bristol Bay fishermen taking their earnings out of state without paying anything, but at $0.50/lb many of us are barely hanging on. I agree seafood needs to be taxed, but not that high.

Anonymous said...

This ain't a state lease. We need to stop this. We aren't giant oil companies. Limited entry keeps us very small. Some of us make our only income from fishing. No!

Anonymous said...

Not really a Republican/Democrat issue as it is a user group issue. Dunleavy represents Mat-Su sport and personal use interests and would love to see commercial fishers go bye-bye.

anonymous said...

If anyone had observed the Dumbleavy questions and comments to ADF&G on finance issues at the Senate sub-committee he chairs; This bill is no surprise. Yet we have Czar Clem telling everyone that the commercial fishing industry needs to pay a royalty tax. We are now paying more than is necessary for our permits fees which this administration and ADF&G are now absorbing that excess revenue. Lost our protections with a strong CFEC division. Doing away with the 3,000 dollar CFEC limit which will allow the legislature to increase our fees. Raw fish tax, business tax, fuel tax, no permanent fund or minimal based on oil royalties, sales tax, increase of borough and municipal sales taxes and property taxes, and to top it all off, an income tax. So if you live in Alaska and be a part of the highest per-capita living expenses what is your incentive to continue? Piece meal taxing,in time,will injure our industry to the point where the marginal rural fisheries economics will collapse and others will barely survive, if at all. Moody says Alaska is in a recession! Commercial fishing is the States #1 employer for decades. Bad stuff in on our horizons. Just who in the capital is willing to stand up for the resident fishers of our state. The ones the legislature and Governors have turned their back on for so many years and are now squeezing the last vestige of life out of us!

Anonymous said...

Why would a legislator think you could add 12.5% to existing operating costs for commercial fishing in Alaska and expect to be reelected? I understand there are budget issues but new taxes IF deemed necessary need to be phased in via smaller increments over a multiyear period so as to not have dramatic adverse affects on existing business models. Good communication on the front end so that fishermen have time to plan.

As the banker for dozens of fishing operations, I get to see the real margins made from commercial fishing operations and what will happen here is that the larger operations/multiple boat owners will grumble but be able to absorb the cost. Smaller owner-operators (who represent far more Alaska votes) will be the ones who are really damaged because they don't have the benefit of higher margins related to economies of scale. Anyone who doesn't think a 12.5% jump is very meaningful is spending too much time talking with fishing companies and not enough with actual fishermen on the dock.

Anonymous said...

We need to stop crying on Deckboss and start writing letters to the legislators, put useful time to call/write to all senators.

Kevin Sund said...

Not disagreeing with your point. But I think the charter folks pay a sales tax (not state, maybe it should be?) on their trips. And at the price of some of those trips it would be a good chunk.

Let's call it what it is. A crew share for the state!

Anonymous said...

The guides and charter operators are also commercial fishermen. They make money fishing. They should also be included. 12.5% is the profit margin for many fishing businesses. Bring back the state income tax.

JKromray said...

Sen. D has the constitutional right to catch fish every day of the year to feed his family, and now he wants to tax seafood the same as oil? How can an individual harvest their own oil? Derp!

Anonymous said...

WTF. Republican Dunceleavy wants to impose a tax on Alaskan's who fish for a living? I was told that it is a democrat who would do such a foolish thing. Maybe it's a Wasilly thing. What the hell, does Wasilla breed idiots?
Is this to better the climate for doing business in Alaska? What a freakin fool.
This BETTER not be a ploy to bring in a 6% tax. I'm so f***ing mad right now.
If it's not this Kenai River sports fishing organizatkon, it 10 flipping others. I've had it.

Anonymous said...

Yeah, no thanks. It's going to hit a breaking point pretty soon. Nothing ever seems to get cheaper.

Anonymous said...

February 24, 2016 at 2:17 PM - - - just cut and paste this whole string of comments to our legislators...they'll get an idea of what the real world is talking about and the real impacts this asinine bill would inflict on our fishery - yeesh

Anonymous said...

Shows you how he has no clue cause he only calls for the tax on the LE and IU permits and leaves out the federal fisheries and non LE fisheries. Never gonna happen

Anonymous said...

Put it in an email to him.

Senator.Mike.Dunleavy@akleg.gov

ND

Anonymous said...

If you throw this royalty at the 2014 numbers that were taxed by the state, it would come to about $231M. Please note that this royalty is in addition to the rates we already pay the state, so add that to the $60M that was collected for that year.
If you live in a coastal community or commercial fish, you have a basic understanding of how severe this proposed tax is, and how it would cripple the industry and our communities.
Remember, the bulk of Alaskan's population lives in a place where the economics of commercial fishing is not touching their lives. To them commercial fishing is an industry of out-of-staters who come up and take all the money they make home. Many don't realize we already pay taxes. Many are lined up on the Kenai, shoulder to shoulder, cursing the industry for taking all their fish. All these people means they have their legislators ears. That is what is scary to me. Everybody wants a solution to the fiscal crisis that doesn't effect them.
I saw a comment about processors not paying. Capitalism dictates that any taxed assessed on industry will trickle down and ultimately be paid by fishermen. Ever wonder why the majors are based in Seattle?
And finally Kevin Sund, yes charters and lodges do pay a sales tax. Commercial fishermen also pay those taxes for goods and services. Those taxes do not address the actual value of the resources being extracted. While I have no idea how many pounds of fish leave our state on an annual basis, I do know that it is significant, and it has increased exponentially over the last 25 years or so. I would think it more than fair for the visitor/sportfish industry to have a tax at a rate that would be reasonably close to what comm fish pays. Of course, the client would pay the tax, capitalism works the same as it does with the structure of processor/commercial fisherman.

Anonymous said...

Aren't all federal fisheries interim use permits?

matthew olsen said...

Can some one please provide a email address to the legislators here so us fishermen can easily let them know how we feel Us Fishermen Oppose A Fish Tax Of Any Kind
We need to as a group of fishermen Notify the folks that were voted into office to represent us what our opinion is legislator No Taxes / On State Fish Tax / Vote No

Please provide as many email address as possible of the key players (decision makers ).

No corking each other on this one let's stick together

Anonymous said...

Hey 8:58 am. If you started fishing 40 years ago and are still doing it. Sounds like you've complained all the way to the bank. No retirement? Yes there is, you just have to do it yourself. Hard way to make a living? Try working in an office. You'll wish you were out scratch fishing. You are right in that it's not easy. But as the saying goes...if it were easy everyone would do it.

Jason Miller said...

Matt and Deckboss Readers,

This explanation regarding Budget Deficit Resolution by Gunnar Knapp is excellent.

https://www.youtube.com/watch?v=AWZqWwHPcyE

Mike Dunleavy R Wasilla is the sponsor of SB 198 "Royalty Tax"

Email: Senator.Mike.Dunleavy@akleg.gov
District: E
Party: Republican
Toll-Free: 877-465-6601

Alaska Legislature Website for your local legislators:

http://w3.legis.state.ak.us

I say best combination of options is to Cut Spending Across the Board in All Departments, implement State sales tax, eliminate oil subsidies, use a portion of the PFD earnings by reducing the savings percentage and dividend allocations, as they're not mandated by our State Constitution, boom, budget crisis resolved.

Anonymous said...

Processors are profitable and make money. Why are fish taxes only based on the ex-vessel value and not the wholesale export value?

Prior to statehood, the cost of harvesting fish was borne primarily by processors, but not reflective of their overall costs or profits.

Lots of complaining here on the Deckboss about how the game is rigged by processors regarding ex-vessel prices paid to commercial fishermen (50 cent per pound in the Bay), yet no one complains that commercial fishermen primarily bear the burden of fish taxes and any analysis would show that do to economies of scale processors are in a much better position to bear the burden of fish taxes instead of commercial fishermen.

Anonymous said...

As a commercial fisherman and a shore-based processor, this tax will fall squarely on the individual commercial fishermen. Due to global markets and farmed seafood competition all Alaska processors will be forced to reduce dock prices by 12.5% to make up the difference in order to still be competitive in the global market. Just because the processor will be required to remit the 12.5% tax to the state, that doesn't mean the processor is paying the bill.

This tax is bad for the industry as a whole!

Anonymous said...

Here are some emails to the senators, you may send a group email along with your letter, also you may add others to the list (local representatives etc if you'd like)

Senator.Click.Bishop@akleg.gov, Senator.John.Coghill@akleg.gov, Senator.Mia.Costello@akleg.gov, Senator.Mike.Dunleavy@akleg.gov, Senator.Dennis.Egan@akleg.gov, Senator.Johnny.Ellis@akleg.gov, Senator.Berta.Gardner@akleg.gov, Senator.Cathy.Giessel@akleg.gov, Senator.Lyman.Hoffman@akleg.gov, Senator.Charlie.Huggins@akleg.gov, Senator.Pete.Kelly@akleg.gov, Senator.Anna.MacKinnon@akleg.gov, Senator.Lesil.McGuire@akleg.gov, Senator.Kevin.Meyer@akleg.gov, Senator.Peter.Micciche@akleg.gov, Senator.Donny.Olson@akleg.gov, Senator.Bert.Stedman@akleg.gov, Senator.Gary.Stevens@akleg.gov, Senator.Bill.Stoltze@akleg.gov, Senator.Bill.Wielechowski@akleg.gov

Anonymous said...

Alaska's politicians have run the state budget into the ground. When oil was high and lucrative why weren't they saving and planning for years that were much leaner. Nothing but overpaid city, state and federal government employees and programs! As a fisherman, I have always saved a good portion of income from a good season for the next bad season that is inevitable. Alaska is no different than CA,WA or the federal government(for that matter local city and county gov all over the US) Over spend and tax the people for a bail out. Maybe these politicians should give up 12.5% of their income along with the benefits that go with the position. We must make a stand and quit electing officials with insufficient credentials and ridiculous plans of corruption and deceit of the working class.

Anonymous said...

Thank your liberal politicians claiming to be republicans for the destruction of this great state. Notice that they have squandered a surplus and now are going to tax us to death to try to balance it at the same time not losing any income of their own! AK state government is equal to current federal gov policies. What a shame!!

Anonymous said...

So now that the sticker shock is over are we ready to accept 2.5% as a Royalty Tax? Where is the discussion on the full gambit of taxes that the State is going to levy on us as commercial fisherman and as residents? To many people in Anchorage and Mat-Su sucking off the general fund and the PF. I say dedicate the Fund entirely for constitutionally directed needs to support key government funding. Then look at what it takes to make the rest work and tax and charge fees to make up the rest. That will keep us all keenly interested in how are politicians are spending our money. The huge service industry in the main population base in the State is not necessary and does nothing to support the States economy. They produce nothing but a give me society.

Anonymous said...

How a about a royalty tax of 12.5% on all income made working for the state?that's a good portion of the labor force up here and includes all the reps etc and troopers and adfg. Hey the state provides the arena and the "resource" and everyone pays for it. Or even less cost of living pay increases.

Dammit we employ a lot of people in the fishing industry any actually produce something useful. Food! Healthy food

Anonymous said...

11.02 your living in a repuplican bubble!get a life republiykans have been leading the state for years now !look what they have reaped!go f**** yourselves!

Anonymous said...

Another issue is that Anchorage doesn't even have a municipal sales tax like most communities, I'm not sure about the matsu valley. The biggest city in the state wanting everyone else to pay their share.

Jason Miller said...

Great Point 9:21 am, biggest question is how much does the State subsidize the City of Anchorage due to lack of City Sales Tax, and what do they subsidize, as Anchorage doesn't cover the cost of community services with property taxes etc...

Anonymous said...

So the major representation in the Capitol is from the Mat-Su and Anc. They fund Anchorage and complain about supporting the rural communities yet from a resource based economy the only thing Anc. produces is methane gas from the dump! Military operations invest Federal tax payers money to support most of its existence. Federal agencies employ many and offer contracts for rural Alaska. Noting but a hand out society exists in Anchorage. Oh, I forgot the tourist industry, they are quite profitable but how do they share the wealth? Do they come to Alaska to see Anchorage or every where else? Another example of how the population belt is a leach on Alaska's resource wealth. Legislators and this one-time Governor better figure on how to get the Anchorage/Mat-Su base to pay there way for all kind of services that they have been using based on resource extraction activities outside of there area. Instead of attacking fishing, mining and the oil industry they need to do some analysis on how to make their community self reliant. They are the 600lb Gorilla in the room. Rural Alaska still lives off the land not each other.

Anonymous said...

It is about time that commercial fisheries pays something for the extraction of a common resource that is owned by all citizens in the state. It is bad enough that a very few persons get to fish for and then sell the commonly owned resource. It is so much worse when the state does not get something in the way of a tax is is charged for the extraction of oil, which would benefit the state as a whole and its citizens. Either tax the e value of their harvest or the purchase of it by processors and other buyers, or a combination of both. Whether 12.5% is a fair rate remains to be seen. But it is a start and hopefully Dunleavy can get it out of any committees that are chaired by the Commercial fishing supporters. Like Rep Stutz who will try to keep any tax going to a vote in the House.

Anonymous said...

maybe to the uninitiated, a proposal to tax fish looks equitable, but there has already been a lot of water over he dam, in way of how the state has divested it's self of other financial responsibilities related to the resource, and it's extraction.

consider that the state used to help the industry hatch fish, but now the hatcheries have been privatized (except for the sports of course) will the state take back the hatcheries and operate them for the good of all with their new found tax revenue?

the state used to subsidize coastal communities more, but now many boros have severance/landing taxes on fish harvested. will the state relieve the commercial fisherman of those taxes and use some of the new tax revenue to support the rural boros to the same level as the the boros without the severance tax income?

the state used to finance marketing efforts to help the industry, but now the industry taxes its self for marketing. will the state pick up that bill again if the proposed tax is passed?

And why not tax the value added product so that all the processors and other interests making a living from the resource pay their fair share?

Its too easy to think that slapping a new tax on the fisherman will cure-all.

Any industry that receives a benefit from the state will have to be reviewed to see if its taxed equitably, (tourism and sports will not like that idea too much).

All this proposal will really accomplish, is open up a huge can of worms and waste a lot of time and money to restructure all taxation statewide.

Anonymous said...

Royalty is paid for the extraction of non renewable resources. Once gone it doesn't grow back! Thus it makes perfect sense for the State to be compensated for the permanent reduction. Seafood is not "owned" by the State. They are held in trust for the country as a whole. This is a public trust state and thus no one can be excluded, as in access to the resource or opportunity. It is by no means equal in use or abuse. This subject of Royalty is dead on arrival as Dunleavy has stated. The subject of taxes on any resource industry is a non starter with the republican lead legislature. Just because you live in Anchorage or Mat-Su does not mean that you have the right to all the resources and the rewards. You have to earn it, and if you don't like then sign on to Bernie Sanders socialist idea.

Joel said...

So would it be 12% of the dock price of the fish, or 12% of the net profit for a season?

Anonymous said...

"WASILLA BREEDS IDIOTS" ,The best new bumper sticker .

Anonymous said...

This is going nowhere and never will.

http://www.kfsk.org/2016/03/01/fishing-royalty-bill-not-expected-to-move-this-session/

Anonymous said...

Joel,

12.5 % of the ex-vessel(dock price). Really, the discussion is more like 2.5% on the ex-vessel. Processors would collect and be responsible for payment. Fishermen would get charged and can subtract it from their income. Basically 1k on every 40k taxable (very lose interpretation).

Unknown said...

Guess we should tax the skiers and snowmachiners for the use of our snow. How about everyone for the use of our air.I am tiered of people assuming just cause they live here they own it all. You don't. We bought a permit to harvest these fish for the state. Believe me when I say the state gets it share down the line when the raw fish becomes a sold consumed product. If you don't like it but a permit catch some fish and shove them up your butt.

Anonymous said...

the state has no problem stealing the pfd,raising taxs on the working poor!but not once have i heard anyone,republican or democrat talk about the elephant in the room!the unfunded liabilty of bad contracts in the peir one state retirement system!we put 2 billion dollars of our state money in to that badly negoitiated hole last year but i still have not heard anyone say maybe they should take a hit too.maybe they would offer something on their own,just to help, like we're all being asked to do?the ones who could most afford to take a hit.

Anonymous said...

Who says fisheries are a renewable resource?

Salmon in Europe and the Atlantic?

Cod on the East Coast?

Crab and shrimp in Kachemak Bay?

How much tax revenues are coming out of those "renewable" fisheries?

But we have the best managed fisheries in the World!
We manage by fishery data! Fish here come first!
We are sustainable! We lead the world!

And the recent ISER pointed out commercial fisheries in Alaska are subsidized each year by $25 million.

Time to pay the tax man or see our fisheries severely restricted.