Opinions

Medred fell overboard accusing commercial fishermen of not contributing

Craig Medred's Dec. 30, 2014, opinion piece "Oil pays the way while extraction giants like fishing and mining skate" was just more of the deceptive bravado and vindictive rhetoric that appears to be his trademark. I can easily buy into Medred's first few paragraphs pointing out that Alaskans have not let wisdom get in the way of mitigating inevitable declining oil revenues, but the apples vs. oranges comparison of tax rates, royalties and revenues scapegoat commercial fishing in particular and obscure economic realities while further politicizing complex issues.

Direct comparison of a revenue stream from a given resource type to a fundamentally different one is particularly problematic. After all, fishery resources renewable on a consistent annual basis should be and always are treated far differently than non-renewable natural resources like oil and minerals. The state's ability to prudently appropriate revenue from extraction of the resources it controls is also dependent on many other factors specific to the activity such as history of use, sustainability, costs, the effects on other resource use, competing users, etc. ... and politics.

For example, the $1 billion in fisheries value cited by Medred just reflects only one of the main taxes on the ex-vessel price. (Actually ex-vessel value is close to $2 billion). There are many other fees and tax levies on commercially harvested seafood as it makes its someone's plate -- including local landing taxes, license fees, business property taxes, marketing taxes and others. Calculation of the actual tax amount paid by the commercial fishing industry is far more complex than the Medred-cited $7.1 million line item in the revenue report.

Medred conveniently misunderstood that both the "Fishery Landing Tax" and the "Fisheries Business Tax" are levied on the ex-vessel price paid to fishermen, but just accounted for in a different way. Seafood harvests come from skiffs to factory trawlers and everything in between, and target species run the whole gamut from shellfish to finfish, and even seaweed. Harvest as well as management authority -- yielding sustainable catches that are the envy of the world -- is split between the state and feds based on the 3-mile territorial waters boundary. In addition, particularly for salmon, a massive dose of social engineering has been applied to the legal and regulatory framework.

Thus, commercial fishing is regulated, taxed and managed far differently from the other sources of state revenue cited by Medred in support of his claim that fishermen aren't contributing.

Perhaps, if economies of scale, business consolidation and leasing of fishery resources could be more fully realized in the seafood industry, a "Big Three" of fishing companies could be charged royalties and taxed at rates comparable to the oil industry. Never mind the constitutional provision of "no exclusive right of fishery," along with social upheaval brought about by minimizing employment, maximizing efficiency and wealth concentration -- a reality demonstrated to some degree in share-based federally managed fisheries. Then, there is also the usual tendency for co-option of regulators and politicians by an omnipotent few that can ultimately dilute the attempts by government to appropriate additional revenue. (SB 21 -- our new oil tax regime -- might be a poster child for that one based on reports from Gov. Bill Walker and other officials.) There may be some justification for the state to appropriate a bit more "rent" from fisheries -- specifically some of the "rationalized" federal fisheries in which leasing of quota is allowed -- but a blanket indictment accusing the entire fishing industry of skating is deceptive and does not reflect an accurate economic picture.

Medred might also be a little less enthusiastic about royalties and higher taxes from the commercial fishing industry if he followed through on the logic and realized that his coveted sport and personal use clientele might be a little vulnerable. After all, we don't allow residents to individually tap into the pipeline for fun or profit. Medred also conveniently failed to point out that fish taxes are levied on the ex-vessel value without regard to costs that went into the harvest. When the price of fish goes up, the state takes in more revenue regardless of the investments made in vessels, equipment, gear, processing and marketing. In contrast, our tax regime on oil is based on profits -- a format that provides ample employment opportunities for accountants and lawyers.

Medred thinks the mayor and Anchorage Assembly should "roll the rate on my house back to 1 percent to provide me some equality with the fishing industry ..." Huh? Sure, why not? As long as property tax on my fishing business assets gets equal treatment.

When it comes to an accurate analysis of public policy issues, it looks like Medred is skating on some awfully thin ice.

Chip Treinen lives in Anchorage and has fished commercially for over 35 years in a variety of fisheries from Southeast to the Bering Sea. He is the vice president of United Fishermen of Alaska and a member of the Alaska Seafood Marketing Institute's technical committee.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.

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