California proposal to raise fish landing fees 1,300 percent worries processors

California wants to raise commercial fishing landing taxes 1,300 percent, or USD 12.4 million (EUR 11.5 million) – a tax hike commercial fishermen and seafood processors are unsure they can survive.

Fishermen “are very concerned, as are their crews, as are primary processors and the plant workers,” Rob Ross, the executive director of the California Seafood and Fisheries Institute, told SeafoodSource. If fees rise as high as proposed, “many will not fish, as there will be no margin.”

The proposal issued by Gov. Jerry Brown’s administration and the California Department of Fish and Wildlife aims to make up for a departmental budget shortfall that has been growing more severe for years.

Revenues collected by the department have held steady in the last decade, but costs for staff salaries, drought response activities and additional law enforcement personnel and equipment have all risen, forcing the department to dip into and erode reserves. Other costs not initially planned for, such as endangered species management, are also rising.

Money from the state’s general fund has supplemented, but is inconsistent year to year.

Commercial seafood landing taxes, which are set by the legislature, haven’t risen since 1992, and are currently generating revenue that is 0.5 percent of the value of the fishery. While other license fees and taxes collected by the department automatically increase with inflation, commercial seafood landing taxes don’t.

Current taxes range from USD 0.01 to USD 0.05 (EUR 0.01 to 0.04) per pound. Adjusting them to compensate for the inflation of the last quarter-century would require raising them roughly 80 percent, or about USD 750,000 (EUR 694,000) – far less than the 1,300 percent proposed increase.

The department’s main fund, called the Fish and Game Preservation Fund, pays for 400 wildlife law enforcement officers, land management, wildlife conservation, fisheries management and the Fish and Game Commission, which establishes regulations.

Commercial fishing contributes very little revenue, compared to other sources. In 2014-15, general fishing licenses accounted for USD 41.1 million (EUR 38 million) of revenue, out of a total of USD 73.4 million (EUR 67.9 million). General hunting licenses brought in USD 16 million (EUR 14.8 million), while commercial fishing brought in USD 4.4 million (EUR 4.1 million).

Meanwhile, the department spends significant amounts of money regulating commercial fishing. A 2007 analysis showed the department spent USD 22 million (EUR 20.3 million) regulating commercial fishing. Costs have almost surely risen since then, though another study hasn’t been conducted.

“The proposed increase wouldn’t fully fund the cost, but it would fund a great share,” Rachel Ehlers, a policy analyst at the Legislative Analyst’s Office, which reviews proposed legislation, told Seafood Source. “It’s not uncommon for sure to have fees help cover regulatory costs.”

Other revenue sources, especially recreational hunting and fishing licenses, have been subsidizing commercial fishing-related activity, Ehlers said.

The gap between expenditures and revenues surpassed USD 20 million (EUR 18.5 million) in the 2014-15 fiscal year. The balance of the fund has, as a result, been mostly depleted. In 2016-17, the authorized expenses from the fund are likely to surpass projected revenues by USD 18.6 million (EUR 17.2 million). Expenditures have increased and the fund’s balanced has decreased, leading to a projected deficit in 2018-19 if nothing is done.

Commercial fishermen have already been hit by a confluence of environmental and other factors.

Sea urchin populations near San Diego have suffered because warm water temperatures have killed off kelp, an important food source. The sardine fishery has been closed for two years, and salmon are at record low numbers in Northern California. The state closed the Dungeness crab fishery for six months during the 2015-16 season because of worries about Domoic acid.

Ross, of the California Seafood and Fisheries Institute, testified at recent Senate and Assembly subcommittee hearings on the fee increase. He said he told California government officials “that they are out of touch with the industry and that there is no way the commercial fishing industry in California can take a 13-fold increase in landing taxes.”

The Legislative Analyst’s Office has offered some alternatives to the governor’s proposal, including bringing in revenue from the state’s general fund, taxing outdoor gear such as tents and binoculars, and levying fees on outdoor recreation such as whale watching. The state could also tax products that pollute, such as tires, gasoline and pesticides. Or, the department could cut spending.

Ultimately, though, the analysts recommended raising commercial fishing landing fees in some way, but did not endorse a specific amount or method.

The proposal is in a trailer bill attached to the budget, and would have to be approved by the California Senate and Assembly in mid-June.