Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

 
 

Per capita, we're rich, agency says

 


The Haines Borough ranks among the wealthiest communities on the West Coast in per-capita income, according to a federal compilation included in the draft Haines Borough Comprehensive Plan.

The federal Bureau of Economic Affairs compiled the ranking, derived by taking the total income to Haines residents – $154 million in 2010 – and dividing by a population of 2,508, to arrive at a per-capita income of $61,270.

Further, the agency maintains that the biggest, single slice of the income pie in 2010 wasn’t from stock dividends or trust funds, the so-called “mailbox economy,” but from income that proprietors of local businesses pay to themselves.

Borough officials and others questioned the income findings this week.

Unlike census data which are collected by surveying residents about pay, the Bureau of Economic Affairs says it tracks all sources of income using records. Its numbers include figures from tax returns, unemployment, welfare and social security checks, heating subsidies, retirement payments, and investment dividends.

According to the data, per capita income in Haines is the fourth highest among all the counties in a region that includes Alaska, California, Hawaii, Nevada, Oregon and Washington. Its ranking puts the Haines Borough behind three counties in California – Marin, ($82,936 per capita), San Francisco, ($70,190), and San Mateo, ($58,159) – and just above Alaska’s Denali Borough, ($58,159).

The national average for per-capita income is $39,937, according to the data, which also ranks the Haines Borough as 30th wealthiest county, per capita, among 3,113 nationwide.

“Somewhere there’s a fundamental flaw in the analysis,” said Gregg Richmond, a tax accountant and former Haines City Council member. “I think the highest probability is that somebody screwed up putting their zip code on their tax return… How many families of four do you know in this town who make a quarter million dollars a year?”

Richmond, however, allowed the possibility that the numbers may be skewed by an exceptional income. “Maybe one fat cat had an extraordinary event. None of my clients had an extraordinary event like that.”

Jila Stuart, chief financial officer for the Haines Borough, had a similar initial reaction. Stuart oversees the borough’s $11.4 million budget. “It’s interesting, but it just boggles the mind. You see that (income) number and you want to see some back-up to verify it’s correct.”

Federal officials this week said the per-capita numbers may be tilted by a lump of high-income earners amid a relatively small population. They also said that with a small sample size, errors or anomalies quickly can get blown out of proportion.

The agency breaks down the $154 million in income into three categories: earnings ($113 million), dividend, interest or rent payments ($19 million) and “transfer receipts,” defined as payments for which no services are performed, such as government benefits or retirement payouts from private businesses ($22 million).

The agency further breaks down the $113 million into three categories: earnings originating out of town, such as by residents working on the North Slope or Lower 48, ($12 million); losses paid by employers and employees for government insurance programs like Social Security ($9 million); and earnings “by place of work” ($110 million).

“Place of work” earnings are defined as earnings paid in Haines to residents. According to the agency, the $110 million in “place of work” earnings can further be divided between wages and salaries ($47 million) and “proprietor’s income,” or what people pay themselves out of businesses they own ($63 million).

Proprietor’s income as 57 percent of Haines-generated earnings compares to less than 1 percent in proprietor’s income in the next richest place, per capita, in Alaska, Denali Borough, where the same category accounted for less than $1 million of $119 million.

The federal agency’s numbers also show proprietor’s income here has rocketed upward since 2007 when it was only $29 million. Improved prices in the commercial fishing industry may explain that spike, said Thomas Dial, BEA information officer.

A rapid rise in proprietors’ income is a bellwether of rapid commodity prices, Dial said. The resulting growth curves can be especially dramatic when a community is small and focused on a single commodity, like salmon, he said. “The data makes sense if you have fishermen.”

According to the Alaska Department of Fish and Game website, prices to fishermen for chum salmon, which provide the bulk of the fleet’s income, rose from 57 cents in 2009 to 76 cents in 2010.

“There were rough times, but this is a boom period,” said Jason Shull, president of Lynn Canal Gillnetters. “In 2006, people thought I had lost my marbles to think about getting into fishing… Permit values in 2009 were about $45,000. Three years (later), permits are worth about $100,000.”

Jeffrey Newman, an analyst for the BEA, said improvements in the commercial fish industry are likely spilling out to other sectors of the economy, including construction and retail.

On the question of a few individuals skewing per-capita data, Newman recalled how a member of the Microsoft board of directors, living in a small town in South Dakota, single-handedly changed the data for the entire region. In a big city, the director’s income wouldn’t likely impact per-capita data, he said.

The new data contrast with Census Bureau information that found the median household income in Haines in 2010 – $47,981 – was far below the median for Alaska ($66,521) and even below the median for the nation ($51,914).

Borough financial officer Stuart said the town’s “median” income – the income level that has an equal number of incomes above it and below it, is a more meaningful number than a per-capita number.

Mayor Stephanie Scott and others this week pointed to high numbers of schoolchildren whose families’ incomes are low enough to qualify for school lunches.

But Juneau planner Barb Sheinberg, who is writing the comprehensive plan and included the BEA figures, suggested that they don’t necessarily contradict others showing a relatively high proportion of residents in need.

“There are some people in Haines with quite a bit of wealth, but there are those who are living really close to the poverty line. It’s important to recognize the complexity and challenges and contributions that are associated with each group,” Sheinberg said.

Planning commission member Robert Venables, a former borough manager and Haines Chamber of Commerce president, said the fugures were a surprise.

“I think you could say there’s more wealth than we expected in our community. Considering what we know about (residents with low incomes) I think this also shows that the extremes are further apart than we ever knew.”

To see the agency’s figures, go to http://www.bea.gov.