Research Matters No. 96. Commercial Fishing, Mining, and Tourism: State Revenues and Spending

Research Matters No. 96. Commercial Fishing, Mining, and Tourism: State Revenues and Spending
December 18, 2015

How do taxes and other revenues the state government collects from the commercial fishing, mining, and tourism industries compare with what the state spends to manage them? That’s the specific question the Alaska Division of Economic Development asked ISER researchers Bob Loeffler and Steve Colt to answer. In a new study, the researchers report their findings, but they first emphasize that their study is not a broad analysis of all the benefits and costs of these industries, which would also weigh many other factors—including the substantial income and thousands of jobs the industries generate for Alaskans. The researchers also point out that the state’s management goals for these industries include many things besides collecting taxes, and that their study does not say anything about what taxes on these industries should be. So what did they find?

  • Commercial fishing, mining, and tourism all generate combined state and local revenues in the same ballpark—averaging about $120 million to $135 million annually in recent years. But the breakdown between state and local revenues, and the levels of state management spending, differ considerably.
  • All three industries pay more in combined state and local taxes than the state spends to manage them. Revenues from tourism and commercial fishing are especially important to local governments: 60% of the revenue from tourism and 40% from fishing goes to local governments, while less revenue from mining goes to local governments. Counting only state revenues (excluding local revenues), the state spends more to manage fishing than it collects from the industry. State revenues from tourism roughly equal what the state spends for management. Mining brings in about six times more than the state spends to manage it.
  • Most of the state’s management spending for these industries is for day-to-day operations, but capital spending is also important, especially for tourism and commercial fishing. Capital projects help maintain a wide range of state and local facilities and infrastructure those industries depend on.

Bob Loeffler is a visiting professor of public policy at ISER, funded by a grant to the University of Alaska Foundation from the Council of Alaska Producers. Steve Colt is a professor of economics at ISER. The report findings are those of the authors, not ISER, the University of Alaska Anchorage, or the research sponsors.

Download the summary (PDF, 734 KB) or the full report (PDF, 2.6 MB), Fiscal Effects of Commercial Fishing, Mining, and Tourism. If you have questions, get in touch with Bob Loeffler at bobl@uaa.alaska.edu or 907-250-4621.

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