A Senate panel heard Gov. Mike Dunleavy’s proposal to repeal a law that calls for sharing fish taxes between the state and certain coastal communities.

Senate Bill 63 would cost these fishing communities about $29 million in the upcoming fiscal year that starts July 1.

The state Senate’s Community and Regional Affairs Committee gave the bill, one of several supporting Dunleavy’s broader fiscal plan to close a $1.6 billion gap, its first hearing Thursday afternoon.

“The thinking behind this is we need to bring all our revenue streams together, that then can be distributed to benefit all Alaskans statewide,” said Revenue Commissioner Bruce Tangeman.

The state collects two fisheries taxes which it shares with local governments.

The first is a fisheries business tax that gets shared with a municipality where the commercially caught fish get processed.

The second is a fishery resource landing tax, half of which goes to municipalities where commercially caught fish are delivered.

Fifty percent of each tax goes to these communities. Dunleavy wants that money returned to the state’s treasury.

Nearly three dozen people testified at the hearing. Other than Tangeman, no one supported the bill.

“By taking dollars from communities that service the industries on the local level, the impact will require higher taxes imposed by municipalities,” Unalaska Mayor Frank Kelty told the committee. “The administration is in fact forcing local government to tax the people of Alaska negatively and this will impact the quality of life for all Alaskans.”

According to an Alaska Municipal League presentation, the bill would cost Unalaska more than $8 million annually.

Bristol Bay Borough would take a $3.8 million hit, according to the AML. That’s more than half of the borough’s tax revenue.

AML also says the average community impact would be $615,000. The money funds schools, capital projects and public safety.

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