The City of Seward will take a modest hit to its budget under a proposal to end a long-standing allocation of state fisheries tax revenue to Alaskan fishing communities. Fisheries tax revenue provides around $400,000 of the city’s general fund budget of $13 million, or close to three percent.
The measure, currently before the Senate Committee on Community and Regional Affairs, would leave an estimated $28 million in state coffers that would have gone to local governments. It is one of a number of proposals made by Gov. Mike Dunleavy aimed at closing a $1.6 billion budget deficit without introducing new taxes.
The governor’s budgetary wish list includes a number of cuts and policy changes that would have significant impacts in Seward – including substantial reductions in education funding – but few that would directly affect the City of Seward’s bottom line.
“The biggest impact that we do see is potentially with the governor’s plan to not reimburse local governments for the fisheries business tax,” said Finance Director Kris Erchinger. “That is potentially about a $440,000 hit to the general fund. But we didn’t budget that high to begin with in 2019, so it would be more on the order of $350,000 that we expected and did not get.”
The reallocation of the two fisheries taxes – the fisheries business tax and the fisheries resource landing tax – will have an outsize impact on busier commercial fishing ports such as Unalaska and Cordova, where that revenue makes up a large chunk of the municipal budget.
The city has largely insulated itself from fluctuations in state funding by budgeting those revenue sources conservatively, according to Erchinger.
“I would say that we have really done a very good job of looking into the future and making ourselves much less reliant on the state,” she added. “As a result of that, we are going to have much less impacts as a city.”