Haines Borough fish tax revenue likely to stay low in 2022

For the second consecutive year, OBI Seafoods’ Excursion Inlet cannery won’t process fish next summer. The plant’s continued closure likely will mean another year of relatively little raw fish tax revenue for the Haines Borough.

“Our plan for next season is going to be similar to this season,” said Tom Marshall, the Excursion Inlet plant manager. “We’re going to operate it with just a really small crew that will support the fishermen, but we won’t be processing fish in 2022.”

Marshall said the decision pertains only to the 2022 season and that OBI will reevaluate on a yearly basis. He said the volume of fish the company has processed, or was projected to process, in recent years didn’t justify operating plants in both Petersburg and Excursion Inlet, but that the pink run in 2021 exceeded expectations. “We’re hopeful that’s something that’s going to enable us to open up the plant in 2023,” Marshall said.

The National Oceanic and Atmospheric Administration and Alaska Department of Fish and Game recently projected the 2022 pink salmon harvest in Southeast Alaska would be “weak” — at 16 million fish, which still is twice as high as the last even-year harvest forecast. Forecasts for 2022 harvests of other salmon species haven’t been published yet.

As OBI did this past season, a four-person crew at the plant still will provide some services to fishermen and tenders, like fuel and ice, and the company will send fish-buying tenders again to Lynn Canal. But processing will be done in Petersburg. (Fish tax is paid where fish are landed, not where they’re harvested.)

After the 2020 season, when Excursion Inlet operated at reduced capacity during a historically low salmon harvest across Southeast, the borough’s fish tax revenue dipped to $37,240, the lowest since 1990. (Expecting a loss due to the poor 2020 harvest, the borough budgeted for only $35,000 in revenue.) That number was down from $159,924 after the 2019 season; $226,890 following 2018; and $352,884 and $128,174 in the respective years prior.

The Excursion Inlet plant “is a significant source of revenue to the borough from the raw fish tax,” said borough chief fiscal officer Jila Stuart. Raw fish tax revenue goes into the borough’s areawide general fund. It has helped fund harbor improvements and operating costs.

This past season, with Excursion Inlet closed, local processor Haines Packing Company experienced a spike in business. The company’s Letnikof Cove plant processed 2.5 million pounds of salmon—the most since Harry Rietze took over in 2013. Forty gillnetters, or about two-thirds of the Haines fleet, sold their fish to Haines Packing, marking a 60% increase from 2020.

“We are planning on seeing the fish that would have gone to XIP (Excursion Inlet) continue to come to Haines for processing” in 2022, Rietze wrote in an email to the CVN. Rietze said pink salmon aren’t a big part of Haines Packing’s overall production, so he doesn’t expect the low predicted harvest to cause much of an impact. “Overall we are feeling pretty good about next season,” he said.

Even with the boost in taxes from Haines Packing, Excursion Inlet’s closure still could cost the borough significant revenue. The Excursion Inlet plant has processed almost 10 times more fish in past years than Haines Packing did in 2021.

To offset lost fish tax revenue, the borough received $189,650 in 2021 through the federal American Rescue Plan Act. The borough also this year obtained $90,000 in federal pink salmon disaster relief funds after the 2016 fishery collapse. The pink salmon harvest fell about $9 million below average that year.