St. Paul Offers Crab Tax Incentive

St. Paul’s City Council has created a community development tax incentive for the Pribilof Island community that reduces the sales tax for delivery of quota shares not regionalized under the federal crab rationalization program.

The plan is open to holders of B, C, processor and community development quota share, including the newly reopened bairdi/tanner crab fishery, one of the few crab fisheries not regionalized under the crab rationalization program.

Deliveries of Bristol Bay red king crab, as well as Pribilof red king and blue king crab, both of which are currently closed, would also benefit from the sales tax incentive plan, said St. Paul Mayor Simeon Swetzof Jr.

And St. Paul could use the business.

“The community has faced a double whammy of reduced opilio/snow crab TACS (total allowable catches) and reduced halibut quotas, which have severely affected the local economy,” Swetzof said.

St. Paul was hard hit economically when the snow crab total allowable catch dropped from 67.9 million pounds in the 2014-2015 season to 40.6 million pounds in the 2015-2016 season. Then there was the recommended halibut quota for management area 4CDE, which includes St. Paul Island, a drop from 3.7 million pounds in 2011 to 1.28 million pounds in 2014 and 2015, and just a slight increase to 1.6 million pounds in 2016.

The city has had to lay off personnel, cut its budget and dip into its rainy day account to make ends meet and keep its existing commitments,” Swetzof said.
To keep their economy in good health, residents of St. Paul, who have not raised
their sales tax in 45 years, voted to boost that tax from 3 percent to 3.5 percent, to bring the sales tax to levels comparable to those of Akutan and King Cove. Then during a final reading on a second ordinance on June 29, the St. Paul City Council voted unanimously to adopt the community development tax incentive plan for specific crab shares and species.
“It’s a good plan,” said Swetzof. “The city council wanted to generate more revenue, because we took a 40 percent cut in quota of snow crab.”

The Bering Sea commercial fisheries, in particular the snow crab fishery, have benefitted greatly from investments made by the communities in fisheries in related infrastructure, he said. “It shouldn’t have to be just the local residents, who pay for the cost of building and maintaining infrastructure and providing services that benefit the crab harvesting and processing sectors,” he said.