ADFG leaders tout $11 billion return on agency spending

Though it’s a relatively small percentage of the state budget each year, the Alaska Department of Fish and Game wants to show that it’s a worthwhile investment.

Each year, the state spends in the neighborhood of $65 million to $70 million from the General Fund to pay for the department. Combined with user fees and federal grants and matches, the total budget clocks in at about $197 million. According to a number of studies conducted in-house and by the McDowell Group, that supports an economic return of about $11.8 billion annually.

It’s not a huge surprise, even though the numbers are large, said ADFG Commissioner Doug Vincent-Lang. Some of the wages estimated in the industries certainly do leave the state, but much of it stays as well, he said. The numbers are useful to the department as well as for the public to know what the spending is bringing in, he said.

“(About) seven or eight years ago, I think the department slowly started realizing we needed to have a better idea of what our return on investment was,” he said. “I think the Sportfishing Division did a study looking at its benefit to the state of Alaska, then the Division of Wildlife Conservation … not too long after the Subsistence Division got into it, then of course commercial fisheries has been doing it for a long time.”

Commercial fishing is the largest private sector employer in the state, with about 60,000 direct jobs provided by the industry. The vast majority of those jobs are in salmon — about 60 percent — followed by groundfish, halibut and crab, according to the Alaska Department of Labor and Workforce Development. Sportfishing supports 15,879 jobs, while hunting supports 27,000, according to information provided by the department.

Sam Rabung, the director of the Division of Commercial Fisheries, cited a McDowell report and noted that commercial seafood harvesting contributes about $5.2 billion in economic output to the Alaska economy annually in testimony to the House Finance Committee’s subcommittee on ADFG on March 14.

“Managing our fish and wildlife resources comes at a cost that is dwarfed by the return on investment,” he said. “The comfish division’s budget is about $70 million annually, and about half of that is (general fund). But what that does for the state is the direct economic value of commercially harvested seafood contributing to the state’s economy.”

Commercial fisheries contribute about $146 million annually in local taxes, fees and self-assessments while the sportfishing industry contributes about $246 million in taxes. Hunters and wildlife viewers paid a total of $3.87 billion in 2019 inflation-adjusted dollars.

Roughly $35 million to $37 million of the taxes paid by commercial fishermen are directed back into the Commercial Fisheries Division, while the rest goes into the general fund or to pay for other services like aquaculture through a self-assessed fee, Rabung said during the House Finance Committee hearing.

Anglers and hunters also draw down federal funds into the state through license purchases. In 2016, the Legislature passed a bill to increase hunting and sportfishing license fees in response to a stakeholder-led effort to do so, thus allowing the department to access more federal match funds through the Dingell-Johnson and Pittman-Robertson fund programs. According to ADFG, 281,823 Alaskans bought sportfishing or hunting licenses in 2018, or more than half of the state’s adult population.

The department also enumerated the economic impact of subsistence resources. Alaskans harvest about 18,000 tons of wild food annually, according to the department. Calculated at about $6 per pound, subsistence provides between $200.8 million and $391 million in 2019 dollars each year, according to a 2014 report from the Division of Subsistence.

Going into the fiscal year 2020 budget, ADFG received one of the smaller proposed reductions at about 5 percent. Vincent-Lang said he thought it showed that the department is already well-managed and provides a good return.

“When you look at the department budget overall, we came out of the budget scenario largely intact,” he said. “We are having a good return on investment, and I think there was a good understanding by the governor’s office that commercial fishing, sportfishing and subsistence fishing as a key part of the Alaskan identity.”

The department’s default is to manage more conservatively when less information is available to managers. However, cutting the management side can also cause the department to manage more conservatively, Vincent-Lang said.

Significant reductions to the budget would certainly impact the economic benefit the department sees, but a significant increase doesn’t necessarily mean a significant increase either, he said. However, an increase in funding could result in increased opportunity in fisheries like herring or crab, which are currently conservatively managed, he said.

Commercial fisheries are major drivers in communities across the state, especially in coastal communities where there are often not many other economic opportunities. Vincent-Lang said he is planning to work with processors to try to increase seafood processing capacity in communities like those around Norton Sound, where there have been harvestable surpluses of salmon in recent years but not very many processors to buy them.

During the House Finance subcommittee meeting on March 14, Rep. Louise Stutes, R-Kodiak, noted that the reductions to the department were concerning because the loss of funding could mean more conservative management, and thus lost opportunities for fishermen.

“I would like to see you have not only a focus on the impact to the economy but the impact to the fishermen themselves,” Stutes said. “That should be the number one concern of this state: allowing these fishermen to go out and fully prosecute the fisheries. The state wins when that happens.”

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Elizabeth Earl can be reached at [email protected].