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Fair shares

The picture of success, a commercial gillnet hung heavy with sockeye/ADF&G photo

Commercial fishermen, who the state fought to keep working this summer even as COVID-19 shut down many other businesses, are now pressuring the Alaska Department of Fish and Game to reduce the amount of CARES money earmarked for tourism businesses devasted by the pandemic.

CARES – the “Coronavirus Aid, Relief and Economic Security Act – is a $2 trillion federal program intended to extend unemployment for those put out of work by the pandemic, and provide loans and grants to small businesses teetering on the brink of bankruptcy because of government-related business shutdowns.

The United Fishermen of Alaska, the chief lobby for commercial fishermen working in the 49th state, contends it is unfair for the state to allocate $16 million of the state’s designated share of $50 million in fisheries funds to guides and charter businesses.

In a letter to Alaska Commissioner of Fish and Game Doug Vincent-Lang the organization demanded to know why the amount was increased from the $2.75 million suggested by the National Oceanic and Fisheries Administration (NOAA).

The UFA is also upset that some of the money could go to guides or charters owned by people who fail to claim residency in Alaska although the organization appears philosophically dedicated to the idea residency should not play a part in the distribution of federal funds to businesses hurt by the COVID-19 spawned recession.

“We are concerned about non-resident commercial fishermen who fished in Alaska but live in non-coastal states that did not receive an allocation of the (nationwide) $300M from NOAA,” the organization’s letter says.

“We ask that the state of Alaska work with us to approach the Alaska Congressional delegation for a second round of funding to assist all Alaska fishermen, regardless of residence and commercial fishing crewmembers.”

Many of the richest Alaska fishermen are non-Alaskans.

Winners and losers

Alaska’s most valuable commercial salmon fishery – that of Bristol Bay – has long been of greater benefit to non-residents than residents. A University of Alaska study of the Bay concluded that almost 70 percent of the money earned by the commercial fishermen working there flowed out of state.

Approximately 56 percent of the permits fished in the profitable and high-profile Bristol Bay gillnet fishery are now owned by non-residents, according to the state Commercial Fishery Entry Commission.

Most of those Bristol Bay permit holders fished this year despite some rural villages asking for a salmon season shutdown, and the Bay saw another banner sockeye (red salmon) harvest. 

The commercial season did not go so well elsewhere. Commercial harvests of high-value sockeyes were low in both the Cook Inlet and Copper River gillnet fisheries, but that had nothing to do with COVID-19.

The fish simply failed to return in sufficient numbers to allow for intensive commercial fishing.

The situation was much different in the sportfishing world where fish were available but the usual influx of anglers from the lower-48 states was missing with travel hampered by both fear of COVID-19 and state requirements that tourists arriving in Alaska quarantine for up to two weeks.

The state eventually relaxed that requirement and stipulated quarantines need last only until the results of a negative tests for SARS-CoV-2 – the virus that causes COVID-19 – were obtained.

But tourist traffic remained low as evidenced by the $7-million license sale shortfall being reported by Fish and Game. The state agency last year netted about $15.6 million on the sale of non-resident fishing licenses. 

It is looking to collect only about 55 percent of that this year, reflecting a drop of about half the number of tourists who usually show up to fish Alaska in the summer.

Some charter businesses, meanwhile, say their numbers reflect a drop in business even bigger than that.

“My season sucked” is how Bob Candopoulos, the Seward-based owner of Saltwater Safaris, on Sunday summed the summer of COVID-19.

He was not happy to learn of the UFA letter.

“Did you expect the commercial guys to do something different?” he asked. “No one is surprised by those greedy bastards.”

The UFA sees it differently, arguing that “given an estimated 5,000 qualified shares in the sport fishing charter sector, each applicant would receive $7,868 per share. In comparison, there are over 20,000 shares on the commercial fisheries side and commercial fishery applicants would receive only $790 per share.”

How UFA President Matt Alward and Executive Director Frances Leach, the authors of the letter, arrived at that number is unclear. Sixteen-million dollars split between 5,000 people would come to $3,200 per share – less than half the claimed amount in the UFA letter signed by the duo.

But those in the tourism business say the big issue isn’t with the size of the shares, but with who was hurt by COVID-19.

Why, they ask, should businesses that were able to continue working despite the disease be compensated at all? And why, despite standing in line to collect 68 percent of the money in the CARES poll, would commercial fishermen try to take more of it from the businesses that suffered the most during the pandemic?

More, more, more

The UFA letter doesn’t stop with a demand for more money for commercial fishermen whether they worked or not during the pandemic.

The organization said it also wants CARES funds for non-profit salmon hatcheries controlled by commercial fishing interests. Alaska decades ago banned net-pen fish farming, but it has become a world leader in the open-ocean farming of pink salmon.

The industry prefers to call this salmon “ranching” while marketing the fish as “wild caught” rather than ranched. The North Pacific Anadromous Fish Commission (NPAFC) reports a release of close to 1.1 billion young pinks in Alaska in 2018.

The release gave Alaska hatcheries a 73 percent share of the hatchery pinks dumped in the North Pacific Ocean that year, according to the NPAFC. Russia was an also-ran second at 257 million.

Pinks, one of the six species of salmon in the Pacific, now comprise more than 50 percent of all salmon in the ocean. Some scientists believe declines in the numbers of other species of salmon – notably Chinooks, commonly called kings; cohoes, commonly called silvers; and sockeyes – could be linked to their inability to compete with the huge population of pinks.

Pinks accounted for about 51 percent of this year’s modest, by modern standards, Alaskaa harvest of 114 million salmon of all species, according to Fish and Game data, and the hatcheries netted their share of what are called “cost recovery” fisheries.

But the UFA said the cost-recovery fisheries came up short in places.

“Several of Alaska’s salmon hatcheries have faced serious losses in 2020 due to COVID’s impacts on operational costs and seafood markets,” the UFA says. “For these reasons, UFA requests that salmon hatcheries be eligible for relief.

“After significant research, we are unable to identify federal or state criteria that would preclude the hatcheries from receiving relief…,” the organization said.

Salmon markets were disrupted by COVID-19, primarily because they shifted a significant volue of farmed salmon – which now dominate the market – out of the fresh-food supply chain into supermarkets where they compete with wild Alaska sockeye, kings and coho.

There appeared to be less of an affect on pink salmon, however, because many of those fish go into cans. The UFA letter offered no details as to how the operational costs of hatcheries, many of which are in remote locations, were effect by COVID-19.

Political muscle

The UFA is one of the most powerful lobbies – if not the most powerful – in the 49th state. It has long punched above its weight in both the number of Alaskans it employs and its economic contribution to the state.

(Editor’s note: The author once edited the UFA newspaper and did a UFA radio show.)

Until recently, the state was spending more money to manage and police the state’s salmon fisheries than it was collecting in taxes. Fish and Game officials say the state now appears to be breaking even.

And while fisheries are the second-largest employer in the state after tourism, and surely the largest employer in the state this year given the beating tourism took because of COVID-19, the Alaska Department of Labor reports that about 75 percent of those working in the industry are non-resident, seasonal employees who spend only a few months each year in the state. 

Still, commercial fishermen in Alaska retain a highly marketable image as the cowboys of the seas. It is such that one of the candidates for a U.S. Senate seat being voted on this year is running largely on the fact he has been a commercial fisherman and once killed a bear in self-defense, though there is some question as to the latter claim.

Killing a bear in self-defense is right up there with being a commercial fishermen among the touchstones of who qualifies as a real Alaskan.

Commercial salmon fishermen remain revered in many corners of the 49th state while oilfield workers and oil companies, which brought Alaskans wealth, are largely villified.

Thus the UFA protest of CARES funding will be taken seriously, especially as it concerns residency – a touchy point with many in the remote, little peopled state that at times seems more like a U.S. colony.

“The current draft spend plan requires that commercial fishery participants be Alaska residents, but does not impose the same requirement on the sport fishing charter sector,” the letter says. “We ask this be corrected in a subsequent draft, and that commerial and sport fishing charters sectors be subject to the same residency requirements.”

The only problem there is that residency is a moving target in Alaska. To qualify as residents to obtain an Alaska hunting or fishing license in the state, someone must spend a year in-country.

But after that, there is a catch.

Once someone “establishes residency in the state in accordance with the residency provision, (they) remain a resident during an absence from the state unless during the absence the person (1) establishes or claims residency in another state, territory, or country; or (2) performs an act, or is absent under circumstances, that are inconsistent with the intent required under the residency provision above,” according to Fish and Game. 

The bear-killing, commercial fishing, Alaska candidate for Senate – Dr. Al Gross – for instance, owns a second home in Santa Barbara, Calif., assessed at $3.1 million. 

How much time he has spent there in recent years in unclear and largely irrelevant. Many wealthy Alaskans – commercial fishermen or not – have second homes in warmer climates.

And where they are actually resident seldom becomes an issue unless they apply for a Permanent Fund Dividend, the annual payment to Alaskans as a reward for living in an oil-rich state, after spending more than 180 days out of the state, or are caught claiming resident benefits in a state other than Alaska.

The now infamous commerial fishermen Roland Maw, former director of the United Cook Inlet Drifters Association (UCIDA), off and on claimed residency in a post-office box in Kasifof in the 1990s, according to the records of the Alaska Commercial Fisheries Entry Commission.

In his 2014 application for the job of Alaska’s Commissioner of Fish and Game, however, Maw admitted that he was a professor at Lethbridge College in Lethbridge, Alberta, Canada from 1974 to May 2001.

During that time, he spent his summers fishing in Alaska. When, if ever, Maw became an Alaska resident didn’t become an issue until Gov. Bill Walker named Maw to the Alaska Board of Fisheries, and it was discovered Maw was claiming to be both a resident of Alaska and Montana, his home state just south of Lethbridge across the U.S.-Canada border.

He promptly resigned from the Fish Board, the state fisheries regulatory agency, and was convicted of falsely claiming residency in Montana. He has yet to face a jury in Alaska where his problems are bigger than they were in Montana.

Illegally claiming residency for hunting and fishing purposes is a misdemeanor, but Alaska officials investigating Maw’s dueling claims of residency in order to obtain cheaper hunting and fishing licenses concluded that he also lied about his residency in order to obtain PFD dividends.

That is a felony.

To date, Maw has managed to avoid trial with procedural arguments, chiefly the claim that the state can’t prove he actually filed for the PFDs. The applications were submitted online and Maw’s lawyer contends anyone could have filled them out on Maw’s computer.

Given the Americna belief that people are proven innocent until guilty, the charges have not deterred Maw’s invovlement in state fishery politics. He remains a player actively embraced by other commercial fishermen, many of whom don’t seem to care what state he was claiming as his own.

His case underlines the strange nature of residency in the 49th state.

It’s OK if your Alaska friends only visit the cold, dark north when the midnight sun is high in the sky. But it is a crime if your Alaska enemy’s don’t spend 365 days in-country.

And the distinctions only gain worse when there is money involved.

 

 

 

 

 

12 replies »

  1. A state income tax is needed to get some money back from resident and non resident fishermen , guides and oil field workers.

      • Steve O,
        Why should property owners continue to pay the bulk of taxes for borough roads & schools when many of them do not work or have children attending public schools?
        The current tax system is failing Alaskans and a modest income tax around 3 percent is a sensible next step to solve budget deficits & protect PFD.
        Seasonal fisherman use our roads, benefit from our ports and mop up our fish…it is definitely time to tax their earnings.

      • Steve,

        Borough property tax has exactly zero to do with state income tax or spending levels, if you don’t like paying them petition your borough or move out of the borough. I’m not sure how many commercial fishermen use your borough roads or ports, but I guess a tax on the commercial charter guys in your area would make some sense if you really want to tax them extra so you don’t have to pay as much on your property tax to support your borough roads and schools.

        A modest income tax of around 3% will do almost nothing for our state budget but it will run countless Alaskans out of the state so we would probably have to raise that modest tax to make up for the lost revenue thus further deepening the problem. I’m perfectly open to the idea of a tax on fish similar to how other resources are taxed, take oil for example, we could tax fish just like we do oil…but then no one would fish since keeping a modest 3-5% of your yearly catch isn’t enough to float a boat. So maybe we just take a royalty share like we do with oil, that wouldn’t run everyone off but it would put a lot of fishermen and women out of business, it would probably be mostly the low priced Alaskan held permits that wouldn’t be fished though since the highfalutin out of state highliners could maybe afford a 12% off the top cut, but with any luck some of those will go under and hell it might even get some of those permits that are held out of state back into Alaskans hands…who knows.

        And to answer my original question, yes the state did give some of fishermen loans but you’d have to know the terms of those loans to know that they are already being paid back.

      • Steve O,
        This is not just in “my borough”, but in places all over the state where people pay property taxes (like Anchorage, Juneau, and Kodiak)…and YES the comm fish folks use these docks, roads, public safety, etc that are funded & maintained by state and local means.
        If you do not think a decrease in state funding affects local property taxes, then you are either lying or ignorant to the way these local governments are funded throughout the state?
        An income tax will not solve all the budget dilemmas, but it is a very sound place to start.

      • Steve,

        You are aware that the current fish tax that is in place is there to offset the cost of those things for the communities that are impacted, right? Probably not since you don’t live in a community that is impacted by commercial fishing in any meaningful way…well other than commercial charter fishing. The short story is there is a fish tax and it is split with the state and communities that are impacted by commercial fishing to offset the costs associated with supporting those commercial activities.

        A state income tax will not offset your property tax that you pay to the borough…not now, not ever. A state income tax will not solve in any meaningful way the current budget issues, hell they’ve taken half or more of every man, woman, and childs PFD for the past 4 years and that hasn’t even plugged the whole and you think the failed and former governor Walker state income tax plan is going to help? And it’s going to lower your property tax that is imposed by your borough? Hahahahahaha thanks for the laughs Steve!

      • Steve and steve , you are in an important discussion. Hope you don’t mind if I chime in . There is truth to both of your statements. Steve s is keeping social obligations of paying for whats used and to improve society. An honorable thought. Steve o is embracing the reality that its a high probability ( historic fact) if you give the state more money they just spend more money and the citizens know better than politicians where the dire needs are so combined with the fact most people paying income tax need that money already for survival and the fact its not really fair to reach in someone else pocket for things they dont need want or have much say in indicates income tax is not a reasonable option nor is it moral as it creates the relationship of government slave. That said its a simple solution. Simple rarely is the best imo . User fees are a pain but more direct and equitable. Dont want to pay then dont use it . A sales tax would also be direct . I dislike sales taxes but at least its fair . To reduce burden on low earners then sales taxes would be only on luxury items or items not directly used for survival. Non luxury tax items could get pro rated accordingly to survival needs. Granted thsts subjective to some degree but its a start . Steve s is right its a bit iffy to allow out of state workers to get away scott free while profiting handsomely and displacing alaska workers only to leave For a place their money is worth more . How to resolve i don’t know. Perhaps allowing borough income taxes as thats nearly a user fee . ( still probably a bad idea) Its direct and local or expecting boroughs to pay their own way and raising their standard user fees. Not sure how to make out of staters pay fair or what could be considered fair . Feds already take a chunk of that and dispose to states so maybe its a non issue. It would have to be combined with local purchase laws or something to get around people just shipping products from out of state . Then you get black market issues so maybe just user fees to start .

      • I really should have also mentioned my opinion that it’s morally irresponsible to give money to an organization that refuses or is incapable of balancing their budget. Only after they have prooven themselves fiscally responsible and capable should it even be considered to expand the ability to collect taxes further in any form. A balanced budget first period. Living within your means is not rocket science.

  2. What i found to be eye brow raising was, a allocation for subsistence fishers. When i raised the question as to why, and why there was no allocation to subsistence hunters and trappers?
    I was told subsistence fishing was found to be an “essential” and subsistence hunting and trapping was not. This is disturbing to me. It would be the first time congress has determined that subsistence fishing has a higher priority(it is essential) over subsistence hunting and trapping hunting and trapping is not essential). This could be profound in the future.

  3. Reasonably likely there are no city lot residences in Alaska assessed for $3.2 million or more. Alice Rogoff’s asking price is $3.2 million, but it is assessed for under $1.5 million.

  4. It’s never enough for the commercial fisherman. Did former BofF chairman Johnston famously say in response to a proposal to increase commercial harvest at the expense of other user groups, “you get 97% of the seafood harvest and you want more?”

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