Netting tax benefits

It may seem strange for anyone to ask for a tax increase, but that’s exactly what a number of commercial fishermen around Alaska are doing, and Cook Inlet commercial fishermen may be next.

On Thursday, two members of the Department of Commerce Community and Economic Development, by invitation of the United Cook Inlet Drift Association and Kenai Wild, traveled from Juneau to Kenai to tell local commercial fishermen how they can create their own Regional Seafood Development Association.

Once formed, the RSDA would ask fishermen to vote to be taxed anywhere from 0.5 to 2 percent at the dock. The tax is collected by the state but the full amount is funneled to the commercial fishermen’s RSDA, which could use the money for a variety of economic development projects including marketing, product development and research.

The boundaries of an RSDA are based on salmon management areas. On Thursday, Glenn Haight, DCCED fisheries development specialist, and Andy Macaulay, DCCED senior loan officer, advised fishermen interested in creating an RSDA that would represent all permit holders in area H, a slice of Cook Inlet extending from about the East Forlands to Anchor Point.

Creating an RSDA, however, is only the first step. Glenn told fishermen that until permit holders vote to allow themselves to be taxed to support their RSDA, the RSDA is no more than a shell.

For a vote to pass, at least 30 percent of the permit holders must vote in the election and of those a simple majority must vote in favor of the tax. Once an RSDA tax request receives a vote of approval, all of the area’s permit holders become members and are taxed, whether they voted or not.

However, an RSDA must hold separate elections for each commercial fishing group. So if driftnet fishermen vote to support the RSDA, but setnet fishermen do not, then only driftnet fishermen will be taxed and represented by the RSDA.

RSDAs are relatively new, with the first RSDA election having been completed in May 2005. Currently there are RSDAs representing three areas in Alaska, Prince William Sound, Bristol Bay and Southeast. However, the Southeast RSDA’s tax election failed and it remains unfunded.

Based on 2005 commercial fishermen revenues, Glenn estimated approximately how much income an area H RSDA could make. In a year equal or comparable to 2005, Glenn estimated an RSDA taxing all of area H’s commercial fishing groups at one percent could make approximately $300,000.

If after a couple of years of supporting an RSDA, fishermen were dissatisfied with their RSDA, they could vote to dissolve the tax and end their support for the RSDA.

Anyone can start an RSDA, but the RSDA must be a nonprofit and would require a well-thought out foundation and an initial investment to support an election asking permit holders to agree to be taxed. Glenn estimated an area H election would cost approximately $10,000. But Glenn said any fishermen starting an area H RSDA would have an advantage over earlier RSDAs because they can look back on their predecessors’ mistakes and successes for direction.

Those who start an RSDA can lay out a plan for how board members will be elected and sketch a preliminary map of its goals, but must then sell the RSDA to permit holders when it asks them to fund it with their taxes.

Patrice Kohl can be reached at patrice.kohl@peninsulaclarion.com