State allocates $7 million to struggling fishing communities

Money intended to offset fisheries business tax loss

Posted: Tuesday, July 08, 2003

At one time, the boardwalk fishing community of Pelican numbered more than 250 people and received more than $200,000 per year from the state's fisheries business tax. A steady decline in the fishing industry has dropped the town's share of the tax as low as $9,000 four years ago, and its population has shrunk to 115, said Mayor Kathie Wasserman.

Who's getting the money in Southeast and how much?

Angoon: $500

Coffman Cove: $500

Craig: $31,887

Haines Borough: $2,878

Hoonah: $40,739

Hydaburg: $7,210

Kasaan: $500

Ketchikan (city): $40,580

Ketchikan Gateway Borough: $29,365

Klawock: $1,705

Pelican: $92,641

Petersburg: $277,043

Sitka: $171,692

Skagway: $500

Tenakee Springs: $500

Thorne Bay: $500

Wrangell: $13,434

Yakutat: $99,767

But on Monday, Pelican received a check for $92,641 from the state. The money is part of a $7 million attempt to ease the plight of Alaska's fishing towns. The state has allocated federal salmon disaster funds to 63 communities that have lost fisheries business tax revenue. Eighteen Southeast communities are receiving checks ranging from $500 for Angoon, Coffman Cove, Kasaan, Skagway, Tenakee Springs and Thorne Bay, to about $277,000 for Petersburg.

Juneau is not receiving an allocation. Greg Fisk, a fisheries specialist with the Department of Community and Economic Development, said communities that didn't qualify for an allocation either had other revenue sources that offset the business tax loss, or did not experience a decline in business tax revenue.

Processors pay a fisheries business tax ranging from 3 percent to 4.5 percent on the fish they buy. Half that money goes to the state, and the other half goes to the municipalities.

In mid-April, Gov. Frank Murkowski announced a $50 million salmon industry revitalization strategy that includes the $7 million in allocations to communities as well as about $18 million in salmon marketing, $13.5 million for industry development and funds for one-time financial aid to individual fishermen.

Fisk said the state calculated the allocation amounts using an average figure for each community's share of the business tax between 1989 and 1996. That figure was then compared to the amount of tax revenue each community received between 1997 and 2001.

"What we were looking to do is to help those communities that lost revenue because of salmon-related impacts over the last few years. We decided that the best way to address this was to look at their fisheries business tax receipts. That's a statewide program, so it gives an assessment of impact across the state," Fisk said.

The payments are substantial, said Kevin Ritchie, executive director of the Alaska Municipal League.

"This is very critical to helping the communities recover," Ritchie said. "When the bottom falls out of your economy, you have to rebuild and you also have to provide public assistance."

Wasserman said she did not know Pelican would be receiving a check until it came in the mail, and the town has not decided what to do with the money yet.

"There's always lots of places to spend it," she said.

The effect of the fishing industry decline has been dire in Pelican.

"When the fish tax goes down it usually affects everyone in town, either by the amount of work they have or don't have, and that affects some people leaving the community which then affects property taxes and sales tax. It bites into every single aspect of the community," Wasserman said.

Petersburg's $277,000 has not been earmarked, either.

City Finance Director Jean Mack said the tax revenue has typically accounted for about 10 percent of Petersburg's budget. In 1989-90, the city received more than $1 million from the tax, but recently it has gone down to $600,000.

In Sitka, which received about $172,000, tax revenue has fallen from $623,000 in 1998-99 to just under $500,000 last year, said Finance Director Dave Wolff. He didn't have figures from before 1998.

"This year they're projecting that we'll be lucky if we see $400,000, and next year it's going to be even worse because I think right now king salmon is getting 65 cents a pound and there's a lot of fishermen that aren't even taking the boats out," he said.

Wolff said the city hasn't determined what it will do with the money yet.

Masha Herbst can be reached at

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