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By Dan Rudy 

Sales taxes indicate year-end sales slump

 


Local spending appears to have dropped substantially during the last holiday season.

The latest sales tax figures collected by the City and Borough of Wrangell indicated that for the 2016 fiscal year’s second quarter – or from October through December 2015 – only $506,216 in sales taxes were collected, a 16-percent drop over the corresponding period the previous year.

Sales tend to be lower through the third quarter than the second, picking up again during the spring and summer seasons. So in 2015, from January to March the city collected $523,939 in sales taxes, $766,613 from April to June, and $791,052 at the start of the new fiscal year from July through September.

Still, overall sales taxes have slowly increased year-on-year since 2010. At $2.66 million, for instance, those collected for the 2015 fiscal year were up by three percent over the previous year, and nine percent over 2005 when adjusted for inflation.

Among possible reasons for the end-of-year decline are economic impacts from the poor returns for pink salmon last year, which saw a disappointing number harvested in Southeast coupled with rock-bottom prices. The Alaska Department of Fish and Game tallied some 34 million pinks caught, but at 20 cents per pound only fetched about $26 million.

But seafood is only part of the picture. Regionally, reduced state spending may also be to blame. Through budget cuts and attrition, preliminary statistics show Alaska government jobs around Southeast declined slightly in 2015.

“What it looks like altogether is we’re down 350 jobs,” observed Meilani Schijvens of Rain Coast Data, an economic research firm which has run economic projections for Southeast Conference, the Borough, and other entities.

She noted that about 250 of these are state government positions, a sector which made up more than a third of employment earnings in the region in 2014. The other lost jobs are mainly a mixture of healthcare and construction positions.

With Legislators currently looking at balancing a budget whose projected deficit could be between $3.6 billion to $4 billion, more cuts could be likely.

“I think everyone’s holding their breath at the moment,” Schijvens said.

More worrying still are potential cuts to the Alaska Marine Highway System budget, which serves as Southeast’s primary transportation network.

In an effort to raise statewide awareness about the importance of the ferry system to local communities, SEC has collaborated with other development groups to put together a collection of personal anecdotes. Called “The Value of Alaska’s Marine Highway in 25 Stories,” the publication illustrates how AMHS services impact residents.

AMHS serves as an economic engine for the 35 coastal communities it provides service to in Alaska. Each year it ferries more than 300,000 people, generating thousands of jobs and hundreds of millions of dollars in commerce across Alaska.

The publication is available to view at SEC’s website, http://www.seconference.org/sites/default/files/The Value of Alaska’s Marine Highway in 25 Stories.pdf.

In terms of commerce, other concerns are residents’ shopping habits, particularly through online postal orders. On a local level, the Chamber of Commerce is finding ways to keep locals shopping locally.

“We are trying to think of new ways to build the business climate,” Chamber director Cyni Waddington explained.

“One of the things we’re going to do starting next Thursday is an open house for local businesses,” she said.

Every Thursday through the rest of 2016 the Chamber will highlight a different business with an open house. Next week’s business will be Dockside Wrangell, a floathouse bed and breakfast at Inner Harbor run by Chris Hatton. The rotating open houses will give residents and visitors the opportunity to check into businesses they may not otherwise be aware of, while giving business owners the opportunity to connect with the community.

“People don’t know about some of the little things that we have,” Waddington explained. Each week’s open house will be posted online on the Chamber website.

New businesses have been popping up as well, including several new dining options, which Waddington pointed out will add options during the summer season.

“This year visitors will have a whole lot of choices,” she said.

Looking ahead, Southeast Conference is drafting an economic plan for 2016-2020. The action plan takes into account input from Tlingit-Haida Central Council, member communities, industry groups and businesses, and will set goals for the region in the areas of energy, timber, mining, seafood, transportation,

maritime industry and other topics.

Working on its plan since last spring, SEC hopes to present its 2020 Economic Plan when it convenes for its mid-session summit next month. It is still looking for feedback, and a draft plan is currently available at its site. For more information, visit http://www.seconference.org/strategy.

 

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