Voters to decide on contentious fish tax in special election

Sep 25, 2019

The Bristol Bay Borough's general election was postponed. It was originally scheduled for Oct. 1. A special election will be held Nov. 5.  

Naknek fishermen deliver sockeye salmon to a tender, July 2018.
Credit Mitch Borden/KDLG

The Bristol Bay Borough has a problem. In the summer, its population of under one thousand residents increases exponentially, as processors, fishermen and cannery workers travel to work in the fishery. That puts a lot of strain on the outdated sewer system, including how much wastewater the sewage lagoon can hold.

“The end of May we waited till as long as we could, then we discharged the Naknek lagoons," said Public Works Director Roylene Gottschalk, speaking at a borough assembly meeting last month. “We were at nearly four times the capacity at some points. So it did put stress on the system.”

A proposed fisheries business tax is aimed at fixing that problem. The borough assembly voted unanimously last month to put it on the ballot in the borough’s upcoming election.

The measure would place a 1.5% tax on processed fish. That would impact processors in King Salmon, Naknek and South Naknek. Money collected by the tax would help pay for updates to the sewer system, which the borough estimates will cost a total of around $30 million.

“We provide the infrastructure and the wastewater system for about 10 major fish processors in the Bristol Bay Borough," said Gregg Brelsford, the borough manager. "And over the years, the industry has expanded up to the limits of the wastewater system.”

In order to accommodate the expanding industry, the borough’s plans include enlarging pipes and updating pump stations and electrical systems. 

Exactly how much revenue the tax would generate depends on how many fish return in a given summer. Based on the past several years, Brelsford estimates the tax would generate about $3.5 million a year.

But the tax is controversial. Processors who spoke at the assembly meeting weren’t happy about the strain it would put on them. John Lowrance works for Silver Bay Seafoods. He said while Silver Bay recognizes the need for improved facilities, they hadn’t had enough notice to review the issues surrounding the tax.

“Cause, make no mistake, if you’re going to tax the processors, you’re taxing the fishermen. That’s where it’s going. It’s going right downhill to the fish price,” Lowrance said.

Laura Zimmen, a commercial fisherman and borough resident, said the borough needed to have a backup plan to pay for the sewer if the fish didn’t show up. She also echoed the belief that the tax would end up impacting fishermen.

“To sit here and think otherwise would be like closing your eyes about it," she said. "It’s going to happen. They’re not going to take that tax and absorb it. It’s going to come down into what we’re paid at the end of the year for our fish.”

Zimmen pointed out that fishermen already pay a 3% tax to the borough and a self-employment tax. Drift fishermen also pay a 1% tax to the Bristol Bay Regional Seafood Development Association. She said this tax would stress the sector even more.

The one thing everyone agreed on was that the sewer system needed to be fixed. According to Mayor Dan O’Hara, funding the updates is critical to the survival of the fishing industry.

“If [the borough dock] breaks down, the fishermen are not going to be fishing," O'Hara said. "If that sewer fails, the fishermen are not going to be fishing. So this is the key right here, to whether we make it or we don’t make it.”

As it stands now, the first 50,000 pounds of fish processed would be exempt from the tax. There’s also a sunset clause that sets the tax to expire six years after it goes into effect. If voters pass the ordinance, it would apply to the next fishing season. That means that no revenue would come to the borough until 2021.

The special election takes place Nov. 5.

Contact the author at isabelle@kdlg.org or 907-842-2200.