Alaska legislators are asking the key marketing agency for the state’s seafood industry to dig deeper into its own reserves to help out in a budget crisis that continues to drain monetary reserves.
While acknowledging the “good work that the Alaska Seafood Marketing Institute is doing,” both domestically and around the globe, Sen. Anna MacKinnon, R-Anchorage, co-chair of the State Senate Finance Committee, asked during a committee hearing on Jan. 25 if ASMI could draw more on its reserves, rather than take $2 million earmarked from the fiscal year 2017 general fund.
“We don’t have it,” MacKinnon told Alexa Tonkovich, executive director of ASMI, during her presentation to the committee in Juneau. “We can’t make payroll… You have healthy reserves.
“You are asking the state to invest $2 million when we went through two-thirds of our savings.”
Sen. Lyman Hoffman, D-Bethel, wanted to know why the investment that ASMI has made in staff and office expenses in its Seattle marketing office couldn’t be relocated to Alaska, to add, he said, $1 million to the state’s economy. “Seems nebulous to me that the (ASMI) board has not come up with an action plan,” Hoffman said.
Tonkovich began her presentation to the Senate Finance Committee with an overview of the public-private partnership that oversees the marketing of millions of pounds of wild Alaska seafood in domestic and global markets. The seafood industry, she said employs some 60,000 workers in Alaska, and contributes $138.6 million to state coffers in taxes, fees and self-assessments. The seafood industry is the state’s largest private sector employer.
The bulk of seafood revenues come from exports, which are impacted by global competition, and have been hurt by Russia’s embargo, Tonkovich noted.
One half of one percent of the ex-vessel value of Alaska’s commercial seafood harvest is paid by processors to the state, and that added up to $9.6 million this year, she said. ASMI also won a competitive grant, about $4.5 million, from the U.S. Department of Agriculture, to market seafood globally, she said.
The governor’s budget has earmarked $2 million for ASMI in FY 17 and $1 million for ASMI in FY 18. After that ASMI has been advised to look for other funding sources. Tonkovich said ASMI is developing a phase-out plan for FY 19 to reduce expenses, seek alternative funding courses and consider increased revenue from voluntary seafood industry marketing assessments.
“I’m talking prospectively looking at FY 18 dollars,” MacKinnon then added, proposing that would help if ASMI dug into its reserves more.
Tonkovich said she would bring MacKinnon’s proposal back to the ASMI board, but noted that ASMI’s reserves were earmarked to deal with unexpected events in the global seafood industry.
“We need flexibility to react to changing market conditions,” she said “We have had to react very quickly in the past,” she said. “If something happens and we have to respond, we have to do it quite quickly.”
In response to Hoffman’s query about ASMI’s Seattle marketing operations, Tonkovich said she wanted to clarify that two-thirds of ASMI”s marketing staff was, in fact, in Alaska, but again that she would bring the Senate committee’s concerns back to the board.
The senators also asked if there was a way, from a marketing perspective, for ASMI to collaborate with the Alaska Travel Industry Association in branding and marketing of wild Alaska seafood. “Is there a way we could dovetail and get a better bang for our buck out there in the global market?” MacKinnon asked.
Tonkovich agreed that this was a good idea and that in fact the two entities have done so in the past, promoting wild Alaska seafood to travelers to the state. “We have always found a benefit in the past to working with ATIA,” she said.
ASMI’s next board meeting is scheduled for May 8 in Juneau, but MacKinnon said she would like a response by Feb. 15, on what future steps ASMI could take financially to help the state through its budget crisis, from moving staff from Seattle to Alaska to seeking alternative funding.
