Okay, I'm going to call this meeting the House Finance Committee to order. Let the record reflect that time is currently 1.38 p.m.
On Thursday February 5, 2026 present today. We have representative Allard, representative Hannon, a representative Bynum
Repson of co-chair Schruggie, co chair josephson, repson
of Jimmy,
rep son of Galvin, reps and Tom chef ski reps in a step myself cochair foster and just a reminder folks can mute their cell phones and
We have invited testimony today from the Alaska Municipal League on House Bill 284.
That's the Governor's Albinabist Tax Bill.
And then after that, we'll take our presentations from
the Alaskis Seafood Marketing Institute as well as the Allaska Travel Industry Association.
Just a reminder that tonight, starting at 5.30,
we will be taking public testimony for the governor's tax bill.
Just a reminder to my staff, we need to figure out just somebody who can give a quick real high level overview of the sales tax portion of
the bill, whether it's somebody from DOR or it is Mr. Anderson or someone just to kind of let the public know what the main pieces of that bill are.
And then we're going to public testimony.
Just a reminder, we'll be asking folks,
I just want to make sure that everyone has a chance
to speak on the bill.
And so we are asking, folks if they can limit
their testimony to two minutes.
And with that, thank you so much for being with us,
Mr. Nils Andreas and the Executive Director
of the Alaska Municipal League.
And if you could put yourself on the record
and jump right into your slide deck,
I think you've got maybe 2021 slides,
but I thinks somebody was commenting
or commending you on your ability
to condense difficult information
into nice, concise packages.
So sorry to set the bar a little high,
but a lot of confidence in you.
Thank you chair for the record Nils and Reyes from the executive director of the Alaskan municipal League
I will say when I was invited to
Present here today. My first thought was a huntrix line lyric. I'm a gear up and take you down
And I want to say that that's not what we're here for, right?
That we at AML are equally committed to working with state agencies to address a fiscal challenge
that has been outstanding for decades, all right.
Our members for 20 plus years have pointed to the need for a state fiscal policy.
over the last five to 10 years,
we've focused on the revenue shortfall that is facing the state.
So when we think of the problem statement that you're faced with,
it really is a revenue shortfall and
does the State have the ability to meet its obligations?
And when it isn't, what we've experienced during that time is cost shifting to local
governments.
That local governments are increasingly picking up the burden that would otherwise be the
states if it were had addressed fiscal policy sooner.
Member resolutions support a broad-based tax.
They prefer an income tax as it de-conflicts with current taxation at the local level.
They oppose a spending cap, which as potentially proposed,
cost shifts increase amounts to local governments.
We support a sustainable permanent fund draw.
But ultimately, the goal is similar to what I heard
from the committee this morning,
a state that's able to fulfill its constitutional
and statutory obligations.
Here's a quote that one of our members,
shared with us that the fairest statewide revenue tools and income tax at the bottom and you can read that
The proposed fiscal plan, as you have in front of you,
identifies some of the levers available for revenue.
It doesn't reference all of them.
They're clearly,
as was described department by the tax division earlier today.
These are the ones that were selected by
the governor as priorities.
I think we have to understand what's been presented
in terms of trade-offs,
that we're looking at what allows the state
to fulfill its obligations.
What are those tools as they relate to jobs and the economy?
What's the public impact?
What is resident, non-resident impact.
What's the distributional impact and and how do these tools intersect again with local government authority and AMO is uniquely positioned to focus today on the sales tax proposal?
There are comments here and there throughout on a broader fiscal policy that we can talk
At any other point about but I do understand that the Sales Tax Proposals a key feature of this
we think about it at a high level in terms of
other types of trade-offs, a proposal to eliminate the corporate income tax, which
I said has the least impact to jobs and economy.
We look at it in terms of a spending cap,
which we'll push state spending now down, even as costs go up.
We look at it through the lens of a tax that's utilized
by more than 100 local governments.
And we look it and I think I heard this reference
again this morning, does it address the problem?
Does it get you to a state that is able to,
that has the revenue in place to meet its obligations?
And the slides that I'm going to present reflect the comments
and feedback we've received from members.
There is a lot of expertise.
I am not a subject matter expert.
I will do my best.
to carry that, we've had legal counsel review this,
we have had tax administrators from around our membership
review these and hopefully these comments
reflect their perspectives.
I think there's going to be some interesting questions.
I would like to do is do what we did with the Department
of Revenue's presentation which is maybe hold off
until the end of the presentation.
What I'm thinking is
We're already on slide three of twenty one. We've got one hour. I could see us
arguing
all of the
different proposals that AML will have and and what I like to do is maybe just allow you to
Put everything on the table first
And then we can start getting into questions.
So I do have in the queue, however,
at least representative staff,
representative Bynum, did anyone else have their hand up?
I don't see any.
Okay, with that, Mr. Andresen.
So in terms of a sales tax thinking broadly,
so we understand it to be the second most regressive.
We understand that to have the highest non-resident take.
maybe. And I do appreciate the work that's gone into ICER's methodology and its research,
but also the limitations that they, you know, spoke to when they presented, I think, just
last week. There's no data for commercial property.
There is no analysis of oil taxes and corporate income tax in relation to non-resident take.
talk maybe here and throughout about the difference
between macro and micro.
So a non-resident take, as defined by ICER,
is really it's an averaged amount, right?
And so when I look at the community of Tuxa Bay,
or Queethlook, or Huslia, it is 100%, right.
We're not talking about visitor industry in those communities
and nonresidents making up some difference there.
On average, you might get to something around 70%,
but that also takes an account that in Skagway,
maybe it's 50, right?
So residents in different communities
are gonna experience take differently.
And I think that's important to understand.
Yeah, there's high revenue potential.
I thought I saw 830 million,
but if the net is reduced by eliminating
a corporate income tax,
then we have to think again about those trade-offs.
narrower exemptions means a potential revenue increase for local governments,
but there are also new exemptions that most local
governments don't have that reduce that opportunity.
Yes, the state's responsible for collection under this bill.
Maybe there's potential for savings, but it's not outlined what that will cost.
And we could talk about cities that don't currently pay for sales tax collection,
where that's occurring at the borough level instead, for whom this would be an additional cost,
clearly, administration of a new state sales
tax will be challenging for a state that hasn't done that before.
recognize that this is a new tax for the largest population areas in Alaska, that we might think
of sales taxes being very common. But for majority of Alaskans, this will be very new and different.
And in those new communities, it will wait against other taxes that do occur there. It will create
economic friction, which I did have to look up and understand it to mean ways that these new costs,
slow down economic activity.
So in communities where there's a high property tax,
there is no differential here with the state tax
on top of it that account for that local variation.
I want to talk through ten. I'm sorry, mr. Andress and I just want a note we did have I forgot to note
The representative more steps in earlier and just wanted to for the record, so please proceed. Thanks
so ten point
Ten items that I wanna cover today as we evaluate impact and you can see the
charts on the right, so the top one, frequency of sales tax
rates.
And it's important to note the far left 59 local governments
that don't have a sales text.
I think it was referenced or identified in the presentation
by Department of Revenue earlier today,
how we got to an average of 1.82%.
That's if you include 59 zeros.
And that's also, if don' t include,
dozens of other communities that aren't municipal, that don't have a sales tax, which would reduce that rate.
even even more. So we have to be thinking about not averages, but really specific by community and work through those scenarios.
Identify how is this going to impact the people in my district? How is it going
to affect current taxpayers or not in different ways? And you can see how that
plays out across jurisdictions. That average, too, doesn't take into account the current stacking that occurs
city plus borough equals a rate that's not reflected in these numbers.
I also want to point to the chart in the bottom right hand corner, the average sales tax as a percentage of general fund revenue by population.
So you can see different size population and communities in
the percentage that those local governments are collecting sales taxes in relation to their overall general budget.
Some sales tax is really, really important for others.
It's less important, it's a percentage.
But it has a meaning for each of them and we'll talk about later.
The impact of a state sales text and
what it might do to local sales taxes along the way.
From a technical evaluation of the proposal.
There's work to do I was looking at my legal I shouldn't read out my little counsel's opinion on on this
I will say I talked to a senior sales tax administration official
Within our membership and said oh, this could be a new job for you. He said he wouldn't take it. It's unenforceable
so
my job is
to work through those things with you, right?
If the state's gonna pursue a sales tax,
you want it to be workable.
You want to enforceable,
you wanna make sure that it has all the components
that are necessary for it
to effective, you're gonna ensure compliance.
That takes work, it takes investment,
it means that you've gotta have the capacity
within this body and at the State level
to really understand how sales
tax works and functions to most effective.
Here are just a few examples
that's needed.
Most of it has to do with some of the definitions,
and citations.
But at the end of day, you want a law that is defensible,
and that for sellers who are trying
to follow that law, that it's not
challengeable in court.
And right now, we've got some concern
that that not the case.
I did want to flag, at bottom, the broad business
to business exemption categories.
That's new and different for most jurisdictions.
This would result in that lost revenue for most local governments.
And there was talked about earlier the concept of peer omitting.
There are other ways to evaluate why business taxes
might shouldn't necessarily be included under exemptions.
AML administers on behalf of the Alaska Remote Seller Sales Tax Commission,
56 jurisdictions collection of remote sales tax. We've got a 23-page code that is legally
defensible that I compared against this proposed legislation and for each of these items found
Good work didn't go into the state's proposal.
It just means that more work is necessary, right?
We want to make sure that you've got the tools,
the knowledge, the expertise on hand
to be able to develop this if you choose to move it forward
in a way that is defensible, again.
And when it comes to remote sales tax,
there's a lot that's changed.
And we talked earlier this morning about Wayfair
and its effect on collections within the State.
When Wayfair passed, our understanding of how things would work is different than it is today.
So we've already moved beyond, in a lot of ways, some of the early assumptions related to Wayfare.
And now the ability for local governments in states to collect those on those sales.
We're, I should say, unique in the nation.
Instead of Department of Revenue collecting in single, simplified, statewide system,
dollar sales tax commission to basically become a department of revenue to be
way for air compliant to manage the variability that occurs between
jurisdictions and not just rates but exemptions and caps and seasonality it's
not true that you have to have all of those the same what you need is a system
that actually manages for it and we've got that right now
Just to maybe continue a little bit down that thread,
I noticed within the bill references
to the multi-state tax compact
and to SSUTA, streamline sales use tax agreement.
GB is the governing board if you ever see that.
But I would just
Ask you as you're contemplating this bill if you were to take further steps that you would find out more about those and what you are signing on to
Especially for SSUTA. I would say AR SSTC our sales tax isn't part of that
And there are requirements that that do come with that right?
We've got actually a very simplified sales tech system in Alaska
Other states don't and they've had to negotiate pretty extensively with each other to find some common ground
And when they go out of compliance with that common ground,
the Streamline Sales Tax Governing Board can come after them.
And I think a recent article, I mean from the second talks
about sanctions for non-compliance states.
So think about what you're getting into when you are joining
a national level system like that.
I will say that CSPs is a part of SSUTA certified service
and you'll want to budget for those.
There are requirements that come as part of SSUTA,
including addressing requirements,
providing CSPs in a database of all the addresses
in Alaska and the tax rate that is applicable.
And I can talk about how AMLs satisfy that requirement
without addressing, but it could be
that you're in good position to do that.
And you would have to do addressing for every Alaskan business in the state.
One of the big reasons probably for AML to be interested in this topic is that ultimately,
this is about local autonomy and decision-making.
The sales tax in Alaska is local, and part of
the reason that it's local is the State keeps to itself the ability
to implement a net income tax, right?
So local governments are preempted from income
Property tax and sales tax are the ways that we fund
local government in Alaska.
And that's, to a large extent, decided in the Constitution.
We're talking about maximum local self-government,
liberal construction of powers, taxing authority only
with cities and boroughs, which is different
than in many other states, where you also
see school districts and special districts
and Special Authorities.
We also have taxing authority, taxing Authority in Alaska is only devolved to cities and boroughs.
You want to make sure.
that if you're intersecting with their ability to collect tax, you are not diminishing what comes as a result.
You do see within this bill that municipal exemptions are subordinated to state law.
There's no explicit protection right now for local voter approved exemptions.
There is community specific policy choices like caps, seasonal exemptions,
senior exemptions that aren't included in this Bill.
All of those go away.
Right and it's worth pointing out that most of those came because voters said we want them
Voters decide whether there's a sales tax and what rate in communities and voters contribute to local decision-making
When it comes to those exemptions and the state is saying right now in this proposal
All of what voters asked for in those communities will go away based on our new list
of exemptions, I would note that under this bill, municipalities don't have independent audit authority.
It's of course not clear how that should work. There's no ability to initiate the audit
Participate in dispute resolution or prioritize enforcement
And I think this is a big concern that that you should weigh right? How do you make sure that compliance occurs?
Where 106 jurisdictions have currently been responsible for that?
Compliance we lose all of that. That neighbor-to-neighbor relationship that seeing into communities in a way that at the state level won't be
possible you'll you lose that in
in this process.
But it comes to local variability,
and I can provide a better data set for you,
all the different types of exemptions.
This is three different spreadsheets
and 300 plus individual exemptions
that local governments across Alaska have.
I include it here just because it's a lot,
and that's what you're working to,
and, that what your losing potentially through this.
And there are reasons there's that variability.
And even in thinking about the reasons for seasonality,
we have to think about community by community.
What do they need and when do the need it?
When are they buying stuff and
when are choosing not to buy things?
When is subsistence most active?
Is it in the summer when fish are running
and wind sales tax is highest?
Is in Fairbanks when visitors are most likely to attend
winter, when sales tax are lowest.
So you really want to fine-tune your sales
tax to meet the conditions of the community
versus thinking at a macro level, all sales taxes equal
and applies to everybody at the same time
in all the way.
So 136, or maybe not 300.
That's a lot still though.
I should read my slides.
136 different types of exemptions
across those, just 55 local jurisdictions.
Not all of them, well, across 55.
I wanted to point out caps and why they're there. There's not caps in this bill caps are
To make sure that local tax ability is limited on high-cost items. This is when you're buying a fishing boat or a snow machine
Or a car and it ranges. So there's maximum tax paid ranges and Houston $10
$720 in Bethel
That's to protect residents from high cost item purchases that they couldn't afford a tax on beyond that so
you lose that. It also applies, you can apply it to the portion of sales tax in different ranges,
so 300 in North Pole to up to 14,000 in Juneau. Often specific in some locations to vehicle
purchase, but it doesn't, it's not always tied to vehicles,
it could include a cap on a single item or by total transaction. 32 jurisdictions of the 55
I mentioned earlier voter approved exemptions, but we just went through this discussion
and vote here in Juneau where voters chose an exemption on non-prepared food, essential
that goes away under this proposal.
And senior exemptions may be most interesting in some ways.
Senior exemptions aren't common elsewhere in the nation.
They are common in many of our especially coastal communities
but throughout Alaska where we've placed a priority on elders
and seniors and what they've given.
And it's not included in this bill so seniors would be I think negatively impacted especially under this but local variability matters for a reason
The sunset clause that's in here came up a little bit earlier in the Department of Revenue presentation
I just want us to think through like what does implementation look like right so you've got 106 local governments who currently have a sales tax
to unwind it, to communicate to sellers that they don't have
to follow the local sales tax anymore, defer to the state.
You'll have 3,300 remote sellers who have to update their software
and systems that have been developed for current collection
and that we've got in place.
You have 91,000 Alaska businesses that will have
to upgrade or purchase software.
And I know it was mentioned earlier that it's just the flip
of a switch and it is a POS that just will turn on.
That's for one sales tax, but you have to keep in mind
that remote applies to inter-durisdiction sales too.
So every seller will be responsible for sales
into other jurisdictions and back and forth.
So it's not just the one, it is multiple,
and that's where it gets really challenging.
And it's not true either that all businesses have the same type of POS.
So yes, that applies to a restaurant maybe, but it doesn't apply to
a legal law firm or many services.
They're not utilizing the type POS and so you have to think through what does that stand up?
What are those upfront costs that
all those businesses will participate in that then goes away for
the majority of Alaskans when this sunset class will build up, build,
build-up, implement.
And then it'll go away, and all those local governments that will stay the same,
businesses will go through a process of unwinding.
And at the end of the day, you'll be contributing in this short period of time to a continued net out migration.
Another trade-off right that we have to think about human resources keep thinking about those scenarios, right?
So 106 jurisdictions who pay people to administer
Their current sales tax from as little as a 0.2 FTE full-time employee to as many as six in some departments
Section 8 of the bill requires some portion of these staff still collect on other types of taxes in each jurisdiction
These are sales taxes that are applied to other things that the state won't collect for and that you won t have the economy of scale to employ a full enough staff
To do well, right? You'll you'll lose some of that compliance
That occurs
You'll also, because of 4305, 230C, you'll have to retain some staff to inspect the work
of the department.
So you still have maintain some level of expertise so that you understand what the Department
is doing in their collection, and that'll lessen ultimately the impact of savings from
that collection.
And what looks like efficiency when you bring it all together adds up just to complexifying
doesn't result in those savings.
It's not one-to-one, but maybe it's 50%
and we'll have to work through really what that will look like.
You lose the economy of scale.
And there's opportunity.
43, 44, 420 allows the department to contract
as a field agent, basically, on that text.
Let's figure out what that would look like.
Does that mean 106 jurisdictions continue to collect their tax and the states?
Maybe. Maybe you get some economy of scale there.
But we haven't had those conversations with the department.
And those are the kinds of conversations you'd want to have
with jurisdictions that are currently collecting these taxes.
We've talked a little bit about remote versus physical AML.
Currently administers this on behalf of the ARSSTC.
Local governments have invested millions in the system.
In a system that's defensible, that hasn't been challenged,
that 3,300 remote sellers have signed into
and that currently collects $30 million
in remote sales tax for the 55 jurisdictions that participate.
It's streamlined, it accounts for variability,
you can have rates, exemptions.
What everybody has agreed to is definitions.
And if the state agreed
to definitions,
it could be part of this.
It is not true that the State has to take over everything
to comply with Wayfair.
It has think differently.
And that's crucial to really understand how could we be creative
and do things in a way that is responsive to Alaska's needs.
Also, I mentioned addressing earlier, the way that ARSSTC is worked through that is with the Alaska Sales Tax Lookup.
We've invested, again, hundreds of thousands of dollars in a system where an API is available to any of those sellers,
so they can include it in their sales systems, or any seller can look up what the tax rate and what exemptions look like.
within each jurisdiction.
All of that's in place and leverageable,
but goes away under the current proposal.
Clearly, there's going to be investments necessary.
And when you get to the fiscal note,
think about not just what's there, but what not there.
Think through what what is going
to required when it comes to training, travel, software,
intersection with local government sellers.
We don't have a process for a local government fiscal note but this isn't going to be cheap
for local governments to respond and implement corresponding to the next steps that the state
might take. Ultimately it will cost local Government something and we're not sure what the total
revenue would be on the other side. It will cause businesses something to implement this and you
the chart on the top again average sales tax is a percentage of general fund revenue by tax rate range range
So you can see where high taxes is very important
for jurisdictions
When it comes to revenue and cost considerations
Lots of things matter and and I think this is what I've heard most from communities
I think we don't trust the state to do this well, right?
There's prompt payment legislation already where we're talking about delayed payments and reimbursements that can take as long as six months.
Sales tax comes in daily and it's managed monthly or quarterly.
All the remittance in the collection and the reconciliation occurs pretty quickly at the local level.
And we need to have some assurance that it occurs at the same rate at
the state and that's really challenging in this environment.
So we to know that there's efficiency.
We need understand how the states exemption decisions will impact local governments.
And it's not just that automatically a narrower exemption list automatically results in more revenue.
There's new exemptions there that will decrease.
currently collected revenues.
We don't know what the administrative fees by DOR will mean.
And there's no hold harmless or minimum revenue guarantee
at all in the legislation.
That timely remittances important staff time,
software savings or the continued expense will be important.
and work with us on a local government fiscal impact note and we can work through kind of
some modeling about what this will cost local governments. Evaluate multiple software solutions.
I imagine the department is interested in utilizing their current, I've seen other proposals that
But look at what's out there and the world has changed when it comes to software especially
for accounting for variability and ability to manage multiple different types of taxes within
one system. We have to get a better handle on what contracted support looks like and again think
local implementation again it'll take code changes for 106 city councils
assembly boroughs they'll go through their staff will go
through eliminating the things that tie back to the state or didn't there's
gonna be all the communications to public and businesses there is going to be
layoffs for current staff there going be retraining the budget process has to
account for more or less and and an unsurety when it comes to what will come
And we just want you to be mindful as you move forward
about the complexity of unwinding what is currently
a fairly efficient and effective system at the local level.
Again, some additional charts, frequency
of sales tax.
sales tax rates
And I mentioned before micro matters and the next slides will talk a little bit more when we get to higher percentage
ranges for for those local governments who have have them it makes a material difference
They're low key and high key community impacts right there are things that you see that are obvious and there things
That aren't that our nuanced so 72% of Alaskans will experience. This is a new tax
The majority of those will experienced this new text on top of a property tax
And what would happen at the local level is you'd have a discussion about?
Sales tax versus property taxes and you would you move you, would adjust one versus the other?
That's what Kenai Peninsula Burrow did, and sales tax now funds much of its education funding.
But you have those conversations at the local level that a state tax doesn't take into account.
36 communities will see their sales taxes move to at least 9%.
And that's very different than 1.82, right?
It's different from 4, it's more than twice as much as 4.
And for some communities, that tax will be as many as 13%.
which is high across the nation that's high and we need to think about what that looks like
in those those kinds of communities.
We know that people start changing their behavior when you get to a two to three percentage point increase.
And when get above nine and ten percent consumer behavior changes dramatically.
And so where those communities have a higher tax, they'll be some of the highest in the nation
and they will be at risk.
And this is one of biggest fears concerns that local governments have that
current local sales tax rates, which will diminish the ability for local governments to do the job that has been shifted to them over time as the state's reduced its ability.
to do its own.
So here's a short list of at-risk communities,
high-taxed, almost exclusively coastal,
defined by fishing and tourism economies.
They are responsible for ports and harbors,
which they picked up and managed on behalf of the state
or took over from the State,
with the promise of continued support for maintenance
and construction.
Almost all of these have police departments
The majority of community jails are in these communities.
So these are your high functioning have taken on a greater load than the many others in some places.
And are taxing their people to be able to do that.
The state will come on top of this.
force, and I think this is the big fear again,
that residents will rebel, right?
That residents would say 9% and 10% is too much for us.
And the next chance that they have to lower that tax,
they'll say no, or they say, no to a higher
or keep that text.
And that's a discussion that happens regularly
within these communities.
I wanna speak quickly to salience and elasticity.
Our members know about it because they manage sales tax.
And I didn't include in this quote the hell no that was accompanied by it.
But they understand that when you hit a certain point,
there's a tipping point that consumers that residents stop.
they're purchasing, they stop,
they go elsewhere and you don't have the ability to flee
like you used to to online when online is accounted for.
So this is where you get into conversations
about net out migration and it might not be from Alaska.
It might be a high-taxed community in Alaska
to another community and Alaska,
but you'll start having some of those real conversations.
And the concern for communities who already have a high sales tax is that businesses will close.
That's their biggest fear, and I think that's valid.
The benchmarks that I can point to 0 to 1%, there's very little change of behavior at the consumer level.
2% residents might start delaying purchases.
Combining trips kind of finding more efficient ways to consume 3 to 4%.
You start looking for other options.
When you've got choices around, especially high cost purchases, you delay or don't make those.
When you get to above 9% total, your consumption reductions are persistent.
You stop spending pretty much across the board or slow, you're spending across
the Board, which reduces your overall economy.
And you'll get that political sensitivity.
You get increasing calls at the local level where taxpayers are demanding that the
local-level decrease, because that's the level of government they're going to look
to first, knowing that they are not able to address it at a state level.
So I will close with just these last two slides.
Is it possible to build a system that protects local variability and
has the state sales tax?
The answer is yes, we could work with you to get there.
AML members, again, have been supportive of a Rod-based tax, but
not at the expense of their own decision making.
Is that possible?
The structure of this of the total tax burden is limited, yes.
Community by community. How do we do this in a way that that does the least amount of damage?
Are there other better revenue options?
Yes, does this legislation need significant work? Yes to make it more effective and technically correct?
Will it materially affect local government's ability to deliver services?
Yes
right now so
I think that's kind of a cautionary, but also hopeful note, where it's at right now.
It's problematic.
Could we work to get it less problematic?
Yeah, I thing so.
I know the earlier comment was there's no perfect tax.
We should probably unpack perfect.
I thin what we mean when we say there is no
perfect taxes that at some point somebody pays the tax, right?
There's not tax that doesn't impact somebody.
Are there ways to mitigate some of those impacts?
Yes.
I understand, again, all the trade-offs out there,
this versus PFD cuts, distributional impacts,
and so on, there's lots of revenue options
that ICER reviewed that also get you to something like this
without doing the same kind of damage
that it might to local governments.
There are clear consequences for the limiting
of local government decision-making.
It impacts ultimately some communities more than others and at the macro level you may not care that
Two and four is just fine and eight hundred thirty million is. Just fine
And some community's it will mean something very different than other's
It's not just a matter of who pays
But it's all of those trade-offs and the implementation pathways that are very important
Ultimately, the composition of this legislation doesn't address the problem statement.
It doesn�t address revenue shortfall that we started with.
It does not necessarily address instability that were experiencing, and it doesn?t benefit
communities in the long run if it?s conditional on additional elements that materially affect
Our mission is to strengthen local governments, our mission
is improve the condition of Alaska's communities.
We need the state in a position to be a partner in that.
We appreciate the governor's engagement on fiscal policy.
I'm struck that we called for a fiscal
policy 20 years ago, and that was probably the best
time to plant the tree.
Second best time is now, I get it.
But also, let's get it right, right tree,
right place,
right conditions,
all of those things are going to be part of this discussion.
AML supports measures that help to address the state's revenue shortfall,
but again, not at the expense of local government's decision making.
We're committed to being part
of the process and hopefully have provided some input questions,
feedback to you today that you can take with you.
Back to your constituents as you wrestle with these questions at home.
and in your continued deliberations within this committee.
Thank you.
Thank You so very much, Mr. Andres.
And as always, you've kept it simple and easy to understand.
So I appreciate that.
Let's see here a couple of quick comments
and then we'll go to questions here.
You would.
One of your slides you've got gnome there and I know there are sales tax of 6% and so doing the summary if you stack another 4% on that
It's just it really is shocking to think that the sales text could be 10% if if this were to be enacted
And also just nice to get this perspective from AML because you represent
some communities that don't have a sales tax but also many that do so you've got
experience in these your members have probably come to you and said there's a
lot of implications in this and so what seems like a simple thing really has a
lot things that need to be taken into into a consideration we're gonna take
questions as far as we can we do have unfortunately a hard stop at 230 which
is in 10 minutes I do I have three people in the queue so far and that's
We'll take as many questions as we can, but when we get to 2.30, we'll have to all pass the gavel off here.
And then we will bring Mr. Andreasen back if we've got more questions.
So with that, Representative Stout.
I thank Coach Air Foster through the chair too.
Mr Andreas, and thanks for being here,
and first I want to say that I'm I am actually shocked.
Neil that nails that you would think that the state government might operate
inefficiently and not be able to execute a comprehensive transfer of sales.
Obviously this is the most efficient element of all things ever created among all times.
So take over to that.
Obviously being tongue-in-cheek I agree with you.
I do have a few questions for you, first one through the chair.
I appreciate the presentation.
Most of the information that you have presented,
I think, is very helpful and good.
And the critiques are, I I
think quite fair, especially on the legal and the MTC
things that we're going to do.
Although I wonder if.
maybe we're misunderstanding the purpose of the proposal because when we talked
earlier on the bill the purposed the proposals is basically to fund a
statutory obligation that we are not currently meeting so you and your
presentation talked about how municipal governments have to make up for the
states constitutional and statutory obligations this proposal that
we have in front of us it is a tax proposal to meet a statutory
If we're comparing apples to apples, is it better for
the people at AML who already pay a sales tax to get more in the dividend to offset their sales
tax?
And what do we think about that through the chair?
Mr. Andreessen?
Through the Chair, I was hoping not to talk about the permanent fund dividend today.
Representative Stapp,
I think there's a couple things.
One, and we had a member reach out that said,
I mean, this is just the state taxing the PFD.
So we should think about this in terms of double taxation.
So one, if you could argue that reducing the PFD
is the first byte and taxing it is
the second, you can argue it.
That was member feedback.
I think what I would like to see,
and I tried to run some numbers, is
At what point do you pay more in tax than you get in an increased dividend?
And the number I came to was 12,500, like for those Alaskans who make 12500 or less,
this proposal would benefit them.
And if you make more, then you would be taxed more than your getting in the increased PFD.
I don't know, I'm not an economist, but those were the numbers that I found
and it probably depends on like what you actually get to.
I think those are the kinds of trade-offs that we're wrestling with, right, and I will say that
AML's problem statement is revenue shortfall independent of the PFD, so when we say the
problem statements revenue short fall, it's community assistance, its school construction,
major maintenance, school bond debt reimbursement, other types of public benefits,
Like, those are the things that we're focused on,
that you have another statutory obligation is also out there,
but not where we are focused.
In fault, Mr. Chair.
All of them?
Yeah, thank Coach Raphos to the Chair to Mr and Risen.
Thanks for saying that.
That was actually part of my second question.
So when we, when were discussing state statutory obligations
in the context of AML, we were talking about the statutory
obligations that AM L kind of likes and not other statutory
obligations, that are also draws on the state.
budget because again, if we're saying we are failing in statutory obligations, that's
community assistance, school bond debt reimbursement, and that is PFD, those are all statutory
obligations through the chair.
Through the Chair, Representative Stapp.
In this presentation I wasn't picking and choosing I know what we're focused on based on our mission. I would add senior exemption
Reimbursement to say about a hundred million dollars like if we were making a list
It's out there
But you're right that there are additional statutory obligations statutory that are within yeah
And I'm going to go to two other little items here, Mr. Chair, really quickly.
Representative Stone.
Yep.
Thank you.
Coach Raphost, the Chair.
Interesting point regarding the multi-state tax compact.
We're already kind of a member of that under our C-Corp structure.
And, I wasn't aware that if, so if we just have a statewide sales tax, aren't we already?
In the compactor, do we have to do something different to the compact to stay in the
compact? And does this bill potentially unintentionally take us out of the
compact through the chair? Through the Chair, Representative Stapp, there is
reference to changes to your current MTC multi-state tax
Think what the point that we're trying to make is is make sure you've looked into that to know what you're signing on to
What what's required to be part of it?
And how does that affect choices that you might otherwise make right?
Could you do something differently if you weren't and I don't know enough about the MTC to suggest you should or shouldn't I?
Just want you to do some due diligence there and follow up with that
Thank you last one mr. Coacher follow-up. Yep, think coach your foster the chair
I agree with you
I honestly don't know the answer that question too
So thanks for pointing out on the record because it is something we should think about because we probably wouldn't want to unintentionally
Take us out of a tax compact, you know, so
lastly
I know we spend a lot of times about talking about local exemptions and things like that and I fundamentally, I can't speak for the administration, but to me, their proposal is very clearly designed to be low percent, very broad with very limited exemptions.
That's like a very designed policy.
So I guess I think that's a feature and not a bug.
And if that is a future, how would AML work with that through the chair?
Representative step through the chair, I mean I think that you could start over right start at the beginning
What are you required by federal law?
To have as an exemption start there. I
Think there are federal federally required exemptions that aren't in there that we were actually flagged and you should consider so start
There and then I would what I what we would suggest is look through
What are the common exemptions that local governments have
that you could start to deconflict?
What is important to your constituents?
What's common exemption that makes sense?
And you can start working through and negotiating
with local government too around how do we kind of streamlight?
The best tax is low and broadly applied.
So the principle is sound.
The fact that other jurisdictions that
you're taking over like already have lots more
And there are new exemptions that local governments don't have that reduce the net benefit from that.
So it's not automatically true that there will be new revenue to local
governments from this and you want to work through those trade-offs.
So I think start at the beginning, work-through, what do we have to have?
What don t we need to do?
What are the options that we had in the middle and make some priorities based on that?
Thanks.
If folks can hold on to their questions, I do have in the line and I will keep this line up here
off to the side. Ruppson of Bynum, Galvin, Tom Shevsky, and Jimmy. For our next meeting,
my intent is to bring the bill back next week. If Mr. Andreasen is available any time next
week, even if by phone, if you're not in town, that would be great. Just to be able to have folks
ask questions and maybe take our time. There might be more questions from other folks.
But my staff will certainly work with you and so appreciate your being here
So again, we'll bring this bill back up next week with that. I am going to
Take netties appreciate you're helping us out here today, and we will take your brief at ease and will go to our next presentation
Okay, I'd like to start the afternoon hearing
Let's start by doing a little housekeeping. I'm Andy Josephson the co-chair of the operating budget
We're in the Al Adams room on Thursday, February 5th. It's 2.33 p.m
Present in The Room are representative Ballard represent Hannon represent Moore
Representative Galvin represented Thomas chef's key and myself and we're gonna start with
Well, we have with us the Alaska Travel Industry Association, then the Elastic Secret Marketing
Institute because, and this should come in, hopefully no surprise,
we spilled over the previous hearing into the afternoon. We may,
and partly because of the travel investment of time,
we may just take up a TIA today because I have a hard stop at 320, apparently, for subcommittee
start with your presentation.
My apologies in advance to Mr. Woodrow.
We may or may not get to your presentation.
All right.
Thank you.
Can you hear me?
OK.
Thank.
Thank You.
Chairman Josephson, thank you, committee members.
For the record, my name is Jillian Simpson,
and I'm the president and CEO of the Alaska Travel
Industry Association.
as me for sharing or giving me this time today with all of you and I'd also like to recognize the
continued support that this committee has given to our industry over the years whether it's for
tourism marketing or during COVID so thank you for that. And Simpson we've been joined by representative
So I'm going to start by just giving an overview of who we are.
I'll be talking about the number of visitors that come to Alaska as well as the economic
impact.
I will be sharing about our marketing budget for this year and the marketing program that
we're implementing on your behalf as long as to return on investment.
So just to start, ATIA is the statewide trade association for Alaska Tourism.
Our mission is to ensure that there's a healthy and robust tourism economy in Alaska.
And we do that through traditional trade association work advocating on behalf of the industry.
But we also wear another hat where the official destination marketing organization for the
state of Alaska through the Department of Commerce, Community, and Economic Development.
And this is a little bit unusual.
Other states usually have a division of tourism within their government and Alaska used to
do this.
But 25 years ago, several entities, three different entities were joined together to
and to leverage the private sector's expertise
in delivering the program.
So ATIA is a private nonprofit corporation.
We're governed by a 24 member elected board of directors
that are representing different regions and sectors
of the travel industry in Alaska.
And within that is the committee,
the marketing committee that experts apply to sit on
and guide the tourism marketing program
and included on that committee as commissioner Sandy.
ATIA has 634 members across the state, and a lot of them are small businesses.
60% of our membership have less than 20 employees.
So, as I said, there's different things that ATIA does to advocate on behalf of the industry
and different thing that we do for our members, including an annual convention.
We administer the Alaska Host and the Cultural Host Program through a memorandum of understanding
through DCCED.
We have an adventure green Alaska program.
But as I'm here today, it's to talk about the destination marketing program on behalf of the state.
So let's get grounded in our visitors.
So we, in the last couple of years, have had over 3 million visitors come to the State.
They spend $3.9 billion directly with Alaska businesses and communities.
Paying into that in 60% of that spend are from independent travelers.
That results in 181 million dollars in revenues to the state of Alaska,
generating an overall economic impact in the State of $5.6 billion and 48,000 jobs.
I'm just gonna do a little bit of a deeper dive into those visitor numbers if I was here next week
I could give you summer of 2025, but we're still finalizing those so this is the previous year
But we did have a slight uptick in visitors a 1% growth
Last year and you can see that growth was really driven by the cruise sector with
3.5% increase in passengers that came up to Alaska.
Independent travelers actually had a decline last year
of 2.0 and 1.2%.
And so while we were up 1%, I want
to note that US travels reporting
that was in the United States, those trips
were actually up 2%.
So we're not capturing the full market share
of potential visitors to Alaska.
Breaking that down even further. I just want to direct you to this pie chart the green pieces of pie represent our summer
Visitation and so you can see the majority of our visitors do come in the summer time
Winter does comprise 12% of total visitors, which is very important in particular to areas in interior and salt central Alaska
that 12 percent number
Throughout the years is definitely winter has always been a growing
segment for Alaska tourism and last year we saw for the first time a decrease in the number of winter travelers.
When you combine it with our summer
Travelers who travel independently and that just means that they are not taking a cruise
So they're either flying here or they were driving or there taking the ferry the vast majority of them are flying
That total is 42 percent of our year-round visitors are independent travelers
You can see the change in the makeup of those travelers.
We've been seeing a decline in market share of independent travelers and an increase in crews.
So our projections for the coming years,
I can tell you that even though we haven't officially
released the numbers yet, I have seen them
and last summer was definitely flat
across the board for tourism.
Looking ahead to 2026.
I mean, there is some good news when it comes to capacity,
and whether or not that capacity will result in demand
and bookings we don't know yet.
But there will be an uptick in crews.
We have two new cruise lines coming to Alaska,
and we will also have an increase in the number of passengers
that will able to cross the Gulf of Alaska.
So they'll be doing those one-way cruises out of Vancouver
or Seattle and docking in Seward or Whittier.
for those cruise passengers to travel throughout other regions of Alaska.
We've also learned that air capacity is increasing partly to accommodate those additional cruise
passengers, but also there's an opportunity for more independent travelers, so that increase
is happening in Anchorage, and there was a decrease in the Fairbanks Airport for this
summer.
Comparing that to what US travel is predicting
for the rest of the country, they are still showing
another 2% increase in nationwide trips.
That could be good.
The other information that they have shared
is this past year.
International visitors to the United States
is down 5.4%, and Canada was down over 20%.
I'm not sure necessarily how that impacts Alaska,
necessarily.
I think that there's a different perception
of lower 48 in United states versus Alaska.
Especially when it comes to Canadians,
but wanted to share that information with you.
Yes, representative the Hannon. Thank you before we leave that slide slide eight.
Thank You mr. Chairman Miss Simpson, I represent here in Juneau, so I'm surprised to see that
Overall our summer visitors summer 25 was flat because in our community kept getting reported that we were
So much higher by like 400,000 and a half a million up to 1.7 visitors
So was that unique that? We just had more ports of call
Calling on Juno or did other sectors
See a big downturn or were we an anomaly and seeing a Big Up tick in our visitors Miss Simpson
Thank you through the chair representative Han and that's a great question Juno definitely represents. I would say
the community that sees almost all of our crews' visitation.
And so we did see the reports from 2025 is that it was a flat overall.
So with whatever Juneau saw is representative of what's happening in the market.
Just representative Hannon. Yes. It's it's not computing because what we kept hearing was we had more people coming
They weren't spending more dollars. They were lower price point tourists
So our businesses weren t going it s great that we've got another couple hundred thousand. We're not making more revenue
But we add more People volume wise
But maybe our numbers aren't panning out in the
Total of the season after we look at it and reflect on it because it kept getting reported in the news here that we were steadily increasing
And we're exceeding our projections by like you said a couple hundred thousand I think
1.7 through the chair. Thank you representative Hammond
I will have to go back and look at that.
I don't recall that being the case.
We're definitely being able to report per port,
and that's how we're able
to get our overall visitation number.
And so I'm not sure that that,
what you're hearing necessarily correlates,
but I'd like to follow up with you on that if I could.
Yeah, thank you.
Let's go slide nine.
Thank you, just getting into
Tourism marketing budgets in the past this goes back about 10 years and it shows that at one point there was an investment
by the state of Alaska of
16 million dollars through the years there has been a
decrease
Fortunately during the COVID times we were able to have a governor appointed federal grant that supported our industry during that time
the light blue is the State of Alaskan investments and
And the green is the industry contributions, which are what different businesses buy into
to leverage the state's tourism marketing program.
And we always put that money right back into the marketplace.
So this year, we are operating on a budget of $2.5 million, and we're anticipating just
Where the marketing budget is, the more opportunities there are for businesses to buy into the program.
So when it's smaller, there's just less programs for us to offer.
So it also decreases the amount that the industry can contribute.
And to talk a little bit about just a show where Alaska ranks
compared to the rest of the United States.
Tourism marketing is recognized as the economic lever
to drive visitation to this state.
It's what grows demand.
So every state in the country invests in tourism marketing.
Some states have a dedicated fund,
while others commit those funds just
through their general fund.
Alaska is definitely ranking towards the bottom
The average state is spending $22.4 million on tourism marketing,
which is approximately $20 million more than our.
current budget. When you look at the overall spend, that states are investing in the marketplace.
There's over a billion dollars of tourism advertising that U.S. residents are seeing.
And last year, there was actually an increase of 6% in that market. So it's a very competitive
marketplace and it is very hard to make sure that our voices heard. I wanted to also just
through this graphic why is Delaware in the middle of the Alaska and that's because we have the
same size towards a marketing budget that the state of Delaware has and Delaware as you can see
is substantially smaller but it is also trying to attract visitors from just over their borders
from major metropolitan areas to drive to Delaware maybe for a weekend visit it's a last minute
decision we are competing to try to get travelers to spend nine days up here spend several thousands
Usually they're planning up to nine months in advance.
And so it's just harder for us, it is different.
It's hard to compare us to other states in the lower 48, but I wanted to put that comparison out there for you.
Representative Galvin.
Thank you, Coach, your justice ends for the chair.
I appreciate that clearly investment in marketing equals opportunities for
all of us in our economy.
I have a question about slide nine.
We're now looking at approximately 30% of the marketing
spend it comes from industry, about 20%, right?
About 600k and then 2.5 million.
My question is, is that what other states do?
Can you give us a sense of where the funds come from
in other States?
What percentage is coming from
industry to help continue in the market?
Through the chair, thank you, Representative Galvin.
I don't believe it's as high as we are.
At one point, we were able to generate $2 million
from the industry, which again, was when we had a much higher
marketing budget.
And at that time, I do know that other states
were in awe of what we we're able
Generally, especially since we don't have as many tourism businesses as a lot of them do
But for the most part their model is to have the state fund the program and then they execute it
And they'll offer different programs, but I don t believe it s not the same percentage that we are
I d have to look for to clarify though to know for sure what other states do. Okay. Thank you very much slide 11
This year, in the proposed FY27 budget, there is $0 allocated for tourism marketing, and
I just wanted to note, this is sort of a famous story in tourism, that back in 1993, which
Colorado's tourism department was completely eliminated.
It went from $12 million to zero.
And within one year of that happening,
they lost $1.4 billion of traveler spending.
And so there's definitely a negative impact
that can be immediate when there is not an investment
in marketing to drive visitation.
It's like 12.
And 13.
Thank you.
I just want to talk a little bit now
about what we do with the investment
that's currently being made.
And as a destination marketing organization, I'm sure you've all seen this sales funnel
and as the state, we really try to focus our efforts at the top of that funnel and the
awareness section to really get as many high potential visitors as possible to fill that
funnel, and then move them down through continual marketing, messaging them at
the right time, at right place, with where they are in the funnel.
as they move down businesses and communities
can attract them and then convert them into visitors
to their towns and their business.
And when you have a robust marketing program,
you're able to have
a really big funnel that is really wide
and it's really deep.
And I would say right now we're.
It's a little bit more of the shape of a straw than I would say as a funnel with our
investment, but even with two point five million dollars
We are making sure that we are focusing in that mid to top area of The funnel so our target audiences
We we overlay them twice with behavioral as well as geographic and these are based on
Where we can get the highest return to maximize our ROI so we're looking at a
targeting audiences that are already interested in travel that
are very obvious, and then those that
are interested, in the types of activities
that very specific to Alaska, like aurora viewing, hiking,
fishing, glaciers, Alaska native culture,
and cruising.
We have picked six geographic markets to also focus on,
and this is based on where we've seen return, as well as
nonstop flight access to Alaskan.
addition to that, we also were able to create a market potential model last year which has
just given us such rich information that we're able
to make really detailed data decisions based on it.
So a couple of years ago we did an ad effectiveness study and we were
able learn what people spend based
on if they came here, if
they saw our advertising and what the impact of that advertising was we
were also able look at where they
came from.
at almost 300 different markets in the lower 48,
identified their traveling households,
and then if we could do a market penetration
of 44% of those traveling household seeing our ads,
so they become the aware households.
How much money does that cost?
Then how does it?
then cause them to be the ones to incrementally travel to Alaska.
So it would count ones that would already coming,
but ones who were impacted by our advertising,
how much spending they would make in Alaska,
and then what that ROI is on our
advertising spend, what the ROIs for the state.
And so because we have this information,
we're able to really fine-tune our decisions.
And a couple of things that came up as a Phoenix
We've added one because of all the new flights that are coming to Alaska from Phoenix
But also you can see the amazing ROI on it and some of this is certainly
There's a it's very it there's the science too
But there is also an art to it right are we going to be looking at should we be prioritizing the media spend should
We prioritize the RO I on advertising should be
prioritize the economic impact.
So we look at all of those things,
but this model also helped us realize that
because we were investing in Seattle as a market
and because there already is a lot of brand awareness
that we weren't necessarily moving the needle anymore
with our advertising, which you can see,
and so we stopped advertising there.
So this has been a really powerful tool for us.
When we looked at our
Our overall budget distribution, like I said, the majority of the spend is on advertising
and public relations, which is really is what is reaching that top of funnel.
We also have a travel trade program website.
We do commit a dedicated portion of budget which goes into all of these different pieces
of pie to cultural tourism, because we really want to be making sure that everybody knows
that Alaska has been and always will be an indigenous place, and it's really become the
efforts. And to that, we've created a culture guide that is inserted inside of every vacation
planner that's distributed. I will note we did not produce a new vacation planner this
year. We're using a previous one. Of course, a lot of the information about traveling to
Alaska is evergreen, just the challenges that we don't have fresher ads from any new businesses
But this is some of our new ad creative that we're currently running now
We're still doing the also known as campaign and you can see that
We feature some the major marketing pillars of Alaska Aurora glaciers wildlife culture and mountains
The other thing that We've done is we took a brand health study
and looked at what consumers are also looking for
when they choose a destination.
And where can we be influencing their decisions
just through our advertising?
And one thing that we found was that a lot of consumers
are really interested in unique lodging,
but they weren't aware that Alaska,
we have an abundance of that,
and we weren''t necessarily promoting that
as much as we realize we should.
Hence why we had that igloo in that picture.
Additionally, we also wanted to show that we are a wilderness destination, but it can
also be very accessible.
And so those are the two elements that came out of our research that
we've incorporated into our advertising this year.
When we look at our media tactics, it is all digital, and we even had to cut out other
digital.
There's no streaming anymore.
We used to be able to, um, be on Hulu or Disney or Netflix before you're about to
watch something.
There would be an ad about travel Alaska.
as that you can, I've never done this but I guess you could get an ad on your TV and
like interact with it on you computer while you're watching it, that part of the
rich media and we can't afford to do that this year. So we're very much focusing on
digital advertising which is very easy for us to optimize based on responses we
get to either the creative or certain markets or
certain demographics responding to it. We can then lean in more to that to get a
higher response.
I want to talk a little bit about our website TravelAlaska.com.
As you can see, compared year over year, there has been a decrease in the number of visitors
to the site, and certainly that is driven by less advertising in market place.
But the other thing is our organic traffic is going down to, that's due to AI search.
Less traffic means that there's less businesses on our site that are going to referrals.
There's Less Orders for the Vacation Planner, and there is Less Email Sign-up.
So it's harder for us to, we're not converting as many people to the program because of that.
So one of the things that we are doing this year is we making a really big investment
in shifting our content strategy to be able to.
Be better position for AI bots as they're scraping sites looking for answers. So right now
Traditionally what's happened people will go into Google into a search engine
They type in something and depending on keywords and the content that we've produced on travel Alaska
It will show up and then people would click on our website
But now with AI search those AI Bots are just scraping different websites
And if we don't have our site
configured in a way that makes it easy for them,
then they're not going to be pulling our information,
which we are the authority on travel to Alaska.
So we want to make sure that we show up right away.
And so we're working on that just with the way
that were organized in the content.
We're addressing it the ways somebody would put a question
into AI that, where is the best place to view the northern
lights?
We want the answer to the Alaska and not Norway.
So, we re-writing our content to a be able to address that.
We are also restructuring the back end of the site.
because there's other structural components
that make a difference as well.
But in addition to what's happening on the website,
AI also looks at, okay, are you really the authority?
Let's see, is there other
third-party platforms picking up that you know what you're talking about and that
means that we need to have a very strong PR program to make sure that our voice
is recognized elsewhere whether it's in media, it on social media platforms, or
it is on things like TripAdvisor that they're saying the same things in
So, because of that, we are continuing to invest in public relations and we'll continue
to do that.
For this year, our goal is to generate working with travel media, travel writers, editors,
and assisting 250 of them, at least, in order to produce great stories about Alaska.
placement of at least $25 million in advertising equivalency
in earned media.
And one of the key ways that we do that
is through an annual program we put on
called Alaska Media Roadshow, where
we bring together travel writers and different tours
and businesses in Alaska where they can directly pitch
those stories.
And it has been an amazing pipeline in order
to generate great coverage of Alaska.
We also work a lot on social media,
just to make sure that were present on channels very
And we've been able to maintain a high engagement rate,
even though it says 3%, which seems low,
it's actually high for a destination social media page.
We also partner with influencers
and what we call cultural ambassadors,
that's part of our cultural tourism promotional efforts
where we work with
Alaska Natives locally who have a pretty strong following and we partner with them
to share content and for them to be able to tell their stories and their
voice to our followers.
We also work closely with the travel trade.
Those would be travel advisors, travel agents,
tour operators, and our goal is to help them package
and sell trips and itineraries to Alaska year round.
We do that by finding them at different national trade shows.
We bring them to Alaskan on familiarization tours
so they can experience the state firsthand.
And we also have an online training program
called the Alaska Certified Expert.
This year we're going to a few last trade show
do and we're hosting a few less people but we do have a big event happening in Fairbanks
next month called the amazing Alaska experience where we are bringing travel advisors here
to Alaska that we will be able to tour around in winter time and then have one-on-one meetings
with our members.
And we also have a small presence overseas.
We do have our representation office in Germany
to represent Alaska in all of German-speaking Europe,
which is Germany, Australia, I mean Austria, excuse me,
and Switzerland.
And that office primarily works with the travel trade
and with media in those markets to keep Alaska top of mind
as well as to support those nonstop summer flights
that come over the poll into Anchorage.
We do have a small program also in India,
which I know might be surprising,
but that is actually one of the fastest growing markets
to the United States and to Alaska.
brings a lot of value. The cost to it is pretty minimal for the return that we're able to get
because of the exchange rates. So we do have a small investment there as well.
These are just a report of our key performance indicators for the marketing program last year last fiscal year
We had a five million dollar budget last fiscally year
And so you can see the effectiveness that the program has and we we monitor all of these really closely
We're very proud of the return that we're able to offer on the Program itself
But we know that that real return is the impact in Alaska the actual visitors
So, as I mentioned, we have done an ad effectiveness study a few years ago, and what we found
is that those who saw ads that we placed about Alaska were twice as likely to visit Alaska
than those that didn't.
Clear indication that marketing works were able to bend that curve of who would come to Alaska
We're able
to Bend it to make more people come too Alaska because of marketing and those that were influenced by those ads were 71%
Of them were independent travelers
The other study that we just did last year
That was on our brand health also gave us some information on what's called the halo effect and so certainly
Our goal when we place these ads is to attract visitors to come to Alaska.
But there's a halo effect that extends beyond that.
that our advertising doesn't just impact visitation,
it also impacts people's perceptions of our state.
And so people who saw our ads responded
that they were 80% more likely to view Alaska
as a good place to live and twice as likely
as the good places to start a business or a career.
So there's a higher interest in investing in Alaska
by those who've seen tourism marketing ads.
Lastly, I just want to share the circle of life slide with you, which shows how we all
work together, that the reinvestment that
the state has made in tourism marketing generates more visitors,
which then generates spending in Alaska and economic impact,
and again, higher revenues to the the State.
$181 million in revenues to the stage, 15 million of that comes from the vehicle rental tax, which is
Paid by independent travelers in fact 70% of the total amount of vehicle rental tax comes from out-of-state visitors
so a reinvestment just of that of about 70 percent is ten million dollars, which is
continues to be our ask and I want to recognize that there are a lot of
Challenges and there's a lots of things that you are juggling right now and and we want
To work with you to find that right investment to bring
and the game and bring visitors to the state.
Ms. Simpson, thank you for the presentation.
So, two and a half million in FY26.
The board and you are asking for 10 million and FY27.
And the governor has nothing in the budget currently.
That's correct.
Okay.
We can take quick questions.
Ladies and gentlemen, I'd like you to get right to
the question.
So there's a, you know,
And I identify a quick question, represent hand, and then we'll go to Biden.
Thank you, Chair Josephson.
Simpson, the $15 million vehicle rental tax.
That's the total vehicle, rental, tax that isn't correct.
That number that you're bringing here.
Through the chair, yes, representative Hanson, that is the
total that includes what residents are also paying.
Right.
Representative Biden?
Thank You, Coach, your justice and through the Chair.
080 that specifically outlines this tax for vehicle rentals and this is we may appropriate it for this specific purpose
And so I've not been a big fan of taxes for no purpose
This tax is for a purpose that then brings direct economic growth to our communities
And I know that you put in here
in your in you're slide
About the amount of money coming into Alaska and how it directly impacts our
Communities can you talk a little bit about?
or briefly mention disruptions in the economy,
of U.S. economy and how that might overall impact
people spending when they do come to our communities.
Ms. Simpson.
Thank you through the chair, Representative Bynum.
Yeah, that's a great question.
Certainly leisure travel is probably one of the quickest
things to be disrupted when there's economic concerns.
It's the first thing that people.
poll back from. What we have seen is U.S. travel has been doing a lot of reporting on
this, and they have seeing that people are holding back on their spend, but there's still
a high intent to travel. I think, fortunately, people in the United States feel like that's,
you know, they're entitled to that, which I
When there are travel barriers like that, which they're always, you know, there's always something certainly, whether it's the economy
or different regulations
Marketing can help address those barriers and help overcome them or at least be another avenue to try to again
Try to fill that funnel and try and bring in more visitors
So it becomes we become much more susceptible to that when we have low or no tourism marketing funding
And my follow-up would have been exactly that question through the chair.
Thank you for bringing that point up that the more we put our name out there, the
more competitive we become that people will come here.
as opposed to someplace else if their budgets are limited.
So I appreciate you pointing that out.
Thank you.
Representative Thomas-Chefsky, then Galvin.
Thank You, Coach Erdrosin, through the chair.
Thank for being here, Ms. Simpson.
It's always great to see the travel industry.
If nothing less than before these nice pictures of bears
that we hope the tourists don't try to pet.
So three million visitors last year, what's the sweet spot?
How many visitors can Alaska handle?
Is there any kind of estimate on that?
I mean, we only have so much infrastructure.
So how many do you think that we could handle a year?
Ms. Simpson.
Through the chair, thank you, Representative Thomas Zuski.
That is a fantastic question.
I don't have a specific number in mind,
but I do know that Alaska is very vast
and that a lot of our communities are looking
to the travel industry to be able to grow and support
their own local economies.
And so I know we have lot a room to go.
Part of it is going to dispersing where those visitors go,
but there's a ton of opportunity,
and honestly right now I feel like the sky is the limit.
Representative Galvin. Thank you. Coach Joseph sent through the chair. We all are familiar with the vehicle rental tax and
my question is pretty specific.
Are we certain that around 70% of those who are renting cars in Alaska are
from out-of-state our visitors or travelers
that we would guess would be affiliated with work that you're doing?
Ms. Simpson.
Thank you through the chair, Representative Galvin.
Yes, we're pretty close to a certain on that.
It's based on a number that McKinley Research Group.
Back then, it was the McDowell group
had found when they did a pretty extensive visitor profile
survey, and they've applied ratios to that,
and that's also how we determine our visitor volume
when we look at.
Airline when air capacity airline passengers come into the state were able to apply that ratio as well to those
And that's how we're able determine and we were very close with that
We've looked at over the years if that issue has changed and it's been fairly consistent over. The years
So I would say we are confident that 70 percent number
Follow-up. Thank you. Appreciate that guidance and then the other piece is if you have any comment on
Cultural tourism as it relates to what you know the market is internationally
Mr. Simpson briefly. Yes, thank you through the chair of representative Galvin cultural tourism
Is probably it's definitely the fastest growing sector and is something that all what we've known seen as all travelers are extremely interested in it
But you're right in particular
international visitors in particularly out of Europe I would say that there is a very high interest in
Indigenous tourism in Alaska and we have been able to see a growth in that through different opportunities that
that have been offered now.
But I think that there's a long ways
that we can still go with that.
There's great opportunity there.
Ms. Simpson, we're very grateful to you.
Thank you for your presentation.
It's good to see you
Thank You.
I appreciate it.
Mr. Woodrow, our committee,
sorry.
Yeah.
Our committee rewards patience.
So we are going to start your hearing
Okay, so we're going to start if you come on up
So we were going down 320 I'm leaving
Good to see you again and identify who you are and welcome.
If you'll put your name on the record,
you can begin your presentation.
Thank you, co-chair Josephson and members
of the House Finance Committee for the Record.
My name is Jeremy Woodrow, executive director
of The Alaska Seafood Marketing Institute.
And before I start, can I confirm the amount of time
I have for my presentation today?
You likely have in the range, I'm going
to guess in range of 40 minutes.
Oh, OK.
I won't run through the presentation that fast then.
Appreciate that.
So thank you again for having me here today.
And it's a pleasure to follow up behind
Alaska Travel Industry Association.
You'll hear some similar touch points when I talk about the
work that ASME does in our work.
And that's great, because I think the work
that ATI does and the works that
ASEME does complements each other very well.
So in today's presentation I've prepared for you today,
I will go over a brief overview of who ASMEE is as an
a few slides and azimius budgets. I'll talk a little bit about the current status of the
seafood industry's economic state and then we'll go over some of those azmius marketing goals
and I will share a couple of tactics of how we are meeting those goals as well.
So, for those of you who are familiar with ASME and those who might be seeing this for
the first time, ASMI is the state of Alaska's official seafood marketing arm.
We are a public corporation under the Department of Commerce Community and Economic Development
or established in statute to maximize the economic impact of the Alaska seafood resource.
We do this through building and protecting the Alaskan seafood brand, developing and creating
markets for Alaska Seafood Products worldwide, and we work very closely with the
Alaska Seafood Industry to do so.
or as me is governed by a seven member board of directors that are appointed by the governor
of Alaska. The seven members are made up of five processors and two commercial harvesters.
We also have several ex officio members made upon members of the legislature and
members at the Governor's administration.
The ASME board has also created nine board appointed advisory committees.
These advisory committee's are made up of commercial harvesters as well as members of
the processing sector and this is the help advise the board on marketing needs in different
sectors of the seafood world aswell as our different species that are commercially harvested
in the state.
And so while we might have a seven member board that really directs the ASM staff what
to do, we have broader reach on who we listen to from the industry to make sure that we
work we do is closely aligned with industry's needs.
As me's mission, as I said, is to increase the economic value
of the Alaska seafood resource.
We do this by increasing the positive awareness
of Alaska's seafood brand.
As I've said in earlier, we work really closely
with the seafood industry to do so.
We are always championing Alaska sustainable management
of our fisheries.
We have proactive as well as responsive marketing.
to make sure that we're meeting the market needs,
as well as our industry's needs at the time.
We provide quality assurance and technical information
to the industry to help them with those issues.
And as any state agency, we have prudent and official
and efficient fiscal management.
It's important that the work that ASME does return a good
investment back to The State of Alaska
and to our fishing industry and our communities.
In large, the work that ASME does targets retail and food service promotions.
We do traditional advertising as well as public relations, of course, social media.
We provide access to U.S. purchasing programs through our food aid program.
We also, as I said, provide technical resources.
And we also advocate on behalf of the industry to make sure that our seafood is receiving
fair trade and fair access, to markets globally, both here in the U S and abroad.
This helps create additional value to our seafood resource.
By creating a price premium over a competing supply,
and I'll talk about that a little bit more in a later slide.
We also help reduce inventory when we have inventory backlogs
within our industry, and we'll talked about
that in another slide, too.
And then we also, through our promotions,
help create incremental sales, products out in new markets,
introduce customers to new market and new products as well.
As these marketing activities are divided into five main verticals.
We have international marketing and domestic marketing programs.
As I mentioned, one of the times seafood technical program,
we have communications in the public relations program and our global food aid program
which primarily targets government purchase programs
through the United States Department of Agriculture,
but there are some other programs out there too.
If you're to look at Azmi's budget current year, FY2026,
and compare it to the budget request and the governor's
budget for FY 2027, you'll see that they're fairly similar.
And the Azni receives in general
three different pots of money when it comes to our revenues
on any given year.
The seafood marking assessments,
which was reflected to statutory designated programmer seats,
that is what's paid for by the industry.
It's a self-assessment, it is set in statutes,
but the Industry has the ability through statute
to vote this number up, down, or out, you could say.
Right now it's set at 1.5% of X decimal value.
For those of you that might not be familiar with an X vessel value means,
X vessels value is that first sale that happens from a fisherman
to the processor. It could happen at a tender, it could happened across the dock,
but it's that for sale happens on all the fish that's commercially landed in Alaska.
It's shown here in both FY26 and FY27 to look fairly similar in numbers
So just let you know from budget purposes that includes some carry forward in Asme's budget
But it also includes
Some authority as well because we received that revenue in quarterly payments the Department of Revenue collects from the industry
It is actually paid for by the processors, so it's kind of interesting
It based on X vessel value, but what's the fishermen are paid but the processes collect that and they pay that to the department of revenue
ASME has been very successful in recent years in increasing the amount of federal funding
we are receiving as the state agency.
The vast majority of our federal funds come to ASM through USDA for an agricultural service.
Because they are federal fund, like any other federal ones, they come with strings attached.
And since these are through the foreign agricultural services,
they require that these federal fees be spent overseas.
And I'll go into the size of international program in a later slide and talk about what
In the FY26 budget process, Asme also received a $5 million
under search of general fund appropriation.
That was actually as part of the FY25 supplemental
and it was a multi-year appropriation,
we actually were able to spend a little bit of that
in the closeout of FY25 and so we don't have a full
5 million to start FY 26 with,
but we will be spending the majority of
that 5,000,500 appropriation in Fy26.
And we're very appreciative of it
and I'll show you how that impacts AsMe's budget.
next slide. Lastly on this slide, you'll note that our total budget for FY26 was
about 31.4 million. You'll see that the spin plane is much lower than that.
That is a very common practice by the ASME board to ensure that we have
enough funding to start that next fiscal year with in the bank. Like I said,
that statutory designated program received. Some of that is authority, so that's not realized until
that money comes in. So we must start each year with some of the SDPR in the bank so
that we can actually start our marketing activities on July 1.
If you break our FY26 spin plan down by those program areas that showed in a previous slide,
you'll see that about 30% of our budget goes toward the domestic market.
This includes our global food aid program because that targets the USDA and includes
our communications and PR program as well as our food surface and retail promotions.
Just under 60% of our budget goes to the international markets that 14 percent of STPR
Well, that's our industry match. That's what as me is matching those federal dollars that are coming from the USDA foreign agricultural service
You'll see that the pie of federal Dollars is for international market is fairly large
It wasn't that large a couple years ago
But that has increased in recent years and it should stay pretty high moving forward
And the reason we know that is in the one big beautiful bill
that was passed this last year.
There was an increase of the market access program.
The market-access program is a competitive grant program,
ASME is considered a cooperator or a commodity board.
And if you're to look at it in a simplest of terms,
we compete against USB.
poultry, pork, citrus, California almonds.
I mean, the list goes on.
There's about 100 plus of different groups
that apply for these funds.
That program was doubled in the one big beautiful bill.
And so our access to those funds,
which have been stuck at about,
and actually I'll share this like,
is almost be easier to look at.
It was about $4.5 million consistently.
And that's the green bar you see here in this graph.
As you've seen moving forward, we expect that to be increased,
whether it's going to doubled.
We don't know yet.
Those funds are pending where we're waiting on those awards
to come through.
They were delayed because of the government shutdown in the fall.
So they're behind schedule by about a month, two months or so.
And when we should know these amounts.
This is great, though.
This will allow us to do more in international markets.
Though, like I said, it doesn't require us to match that with our industry funds.
While we're on this slide, we'll talk a little bit about where Azmi's budget has been, where
we are going.
You'll see that there's been a bit of volatility in Azmese budget the last few years.
We've definitely had volatility into the seafood industry and so that impacts Azimese
budget when the industry is having impacts, such as X vessel values going down.
Azmeese revenues also go down, you can look at FY20 as a great example here.
that was that blue bar represents the statutory designated program receipts or
this market the assessment that the industry pays to ask me. That was one of
our lowest years actually I think it is our
lowest year on record. COVID year was was awkward for
everything in the state it was challenging.
I would probably be agreeing with a lot of my industry members
that they're just happy they fished that year and so we are happy that
they were able to fish as well too and keep some revenues and
keep product going and continuing to feed Americans and feed people across
One of our challenges that ASME has though, and if you look at starting around FY 22,
23, you notice that our revenue started growing around that time.
We did receive some CARES Act and some ARPA funding, which allowed us to increase our
SPIN plan.
But what happened in fiscal year 22 and actually what had happened, in calendar year
22 was we had the largest return of sockeye return back to Bristol Bay, I'm sure this
is not news to everyone in this room.
I don't ever want to say that we have too much fish,
but it created a challenge,
and it came at probably the worst possible time
for the market.
What was happening in the world at this time,
was we were having, we're seeing soaring inflation.
Consumers had a lot of free cash, right,
because we are coming out of COVID,
and so they were spending at an all-time high.
The market was incredibly confident
going into calendar year 2022 summer
of this fishing season.
It's safe to say at this time that processors paid too much for those fish.
Fishermen, they did really well that summer.
Processors, however, got stuck with a lot of sockeye salmon that they could not sell
because spending from consumers worldwide came to an automatic halt around mid-summer
to that fall.
And when you're holding on in cold storage,
you are paying for that.
You're asking a bank to also give you a loan
to continue to pay for the fish to hold on to it.
And so what happened was the price of fish
started coming down because the market, frankly,
wouldn't buy thefish that the prices of processors
paid from four.
Also at this time, Russia decided to invade Ukraine.
To fund that war,
Russia started offloading its fish in the global market
at rock bottom prices that we,
frankly couldn't compete with it either.
Fast forward another year to summer 23.
We had a large pink salmon return.
Processors told fishermen, stop fishing.
We cannot afford to buy your fish and sell it at a cost of zero.
That's how expensive and how low that's
to rush it was selling to fish in the global market.
What happened in that,
over those two years was one industry came to ask me and said,
we need your help.
We need to sell this inventory of sockeye because if we can't sell socai,
we cannot sell anything else.
So the asthma board at that time said all right, we have no other choice
We got to dip in the revenues and we got an increase our spin plan and help move some of the soca
And so that's why you see our Spin plan go up and that is the blue dotted line in 23 and 24
We've got too a high well unfortunately
Our crystal ball was cloudy at the time
We didn't realize that X vessel values would start crashing at at same time
And that what happened in 24 25 we're seeing that in 26 as well
And so our revenues and our carry forward kind of coming down a little bit
We know this that's why we're forecasting out out to FY 32
Our job is to make sure we manage our budget prudently
And
So we do have a spin plan where we need to get down and kind
Of get our Budget to align with our revenue and that what our goal is by around 31 32
This is just another way kind of to look at what happened with the industry the last few years
And I think looking at the X vessel value is
Just a great comparison to see we were in a moment of stability from 2015 to 2019
We'll say COVID year isn't anomaly things look good in 21
And you can see the wheels start coming off in 2022 and it came to a crash in 2024
Hopefully 2024 is rock bottom
Things looked a lot better last year, but
But these are still preliminary numbers, a lot better is still not where we need to be.
And I wouldn't say that we can say we've gotten out of this hole until we see multiple years
of consistency.
And consistency is what our processors, is that our fishermen, it's what really the entire
state needs to say, okay, we have a very important part of economic engine working again.
That said looking at the seafood industry and and how it's doing if you look back in 2023 and 24, right?
I'm just gonna go back really quick to slide 10 again. These are our two lowest years in the last 25 years,
right
The industry still contributed five point two billion dollars to the state's economy during this time
On average, that's usually closer to six billion. Dollars a little bit over just put that in comparison
That's an average per year. So that s not total over that time
Fisherman's obviously their X vessel values were down as we saw in the previous slide.
They only got an average about 1.5 million dollars. These are still big numbers, but they're not as
good as they could have been or should have had we not gone through the challenges that the
industry saw the last few years. Alaska remains the major player when it comes to U.S. seafood
production. The U S almost two-thirds of all seafood produced in U-S comes from our state.
Scale of it, we're about 1%, and that global production includes aquaculture as well as wild capture.
So we definitely, I think we fight above our weight glass when it comes to the global economy,
but we still have our own challenges aswell.
It'd be easy to say that you can find a commercial fisherman in every single Census Bureau across the states of the
19,000 fishermen that fish in Alaska annually about 58% of them are Alaska residents that represents about 11, 000 fishermen
It's no surprise to me, but it might be a surprise of some that
You'll find the majority of those fishermen in our population centers
especially in Keeneye Peninsula Anchorage in the Mattsu that represent about almost three thousand of
those 11 thousand fishermen
Though you also find quite a few of them in our fishing ports and our popular fishing
ports, it's just Kodiak dealing and I'm sick around at that top six.
The industry contributes about 125 million in annual state municipal federal taxes and
self-assessments each year.
That's paid by both fishermen and seafood processors.
We're not out of this hole yet. So what's asthma doing to help the industry out and move us forward?
Well last year the asthma board directed staff to focus on three main priorities
Our first priority is to capitalize on the Russian import ban and increase the u.s. Market share of Alaska seafood here in the U.S
Our second priority has increased the seafood brand the Alaska Seafood brand recognition of key species and species are Alaska
Sakai salmon pink and keto salmon as well as stable fish pollock and string your products
And our last priority is to differentiate the Alaska Certified Seafood International Program
as the Preferred Origin-based Certification Program in the U.S.
And that's a counter to the Marine Stewardship Council Eco-Label, which continues to certify
Russian...
products in the global marketplace.
If CSI is a new acronym to you, and I'm sure all these
acronyms are, because that's the world we live in,
CSI was formerly known as the Responsible Fisheries
Management Program, or RFM.
It got a rebrand in last year because it's gone global
and it is having more fisheries being certified
in a global scale.
It's never just here in US.
The reason why countering the Russian seafood is so important is one we compete with Russia nearly one-to-one every every fish
We catch they catch two right we share an ocean with them
However, they don't operate on the same scale as we do they know operate in the
Same fair trade practices as what you do or the labor practices
Because of the way that they manage their fisheries and where they process their fish
They undercut us in a global market and it's only fair that
They shouldn't be able to undercut this here in The US which is our most important market for Alaska seafood
In 2023 December of 20 23 by executive order Russian seafood was banned from entering the US marketplace
It was actually done by two different executive orders. I won't bore you with word soup here, but
That ban went in place and there was a grace period for importers to still bring in Russian sea food and we knew for a fact that they
put together as much inventory in those six months by the time it got to when that full
ban went in place by May of 2024 that would hold over that inventory for about 18 months.
Fortunately, in April of last year, President Trump extended this executive order, so the ban
is in a place that has to be renewed each year. But we are starting to see the effects of that
ban really starting come to the marketplace now. This last fall, going into this winter,
with those companies who were prior bringing in Russian seafood, going, okay,
this big has been turned off. I'm now buying Alaska seafood. Let's have a conversation
on how we can promote your product and talk about Alaska's seafood to my customers. So we're
making a difference, but we need that to continue on. That's why we are really happy to say that's
past H.J.R. 29 out of committee this week. HJR 29 supports a continuation of that ban,
and Azmi is fully supportive of HjR29, and we hope that moves to the legislative process,
so we can send that resolution to our delegation in D.C., as well as the Trump administration officials
so they can continue to support the extension of this executive order.
Mr. Woodrow just to keep us on track here. It looks like we've got a little more than 10 slides
And I would guess about 10 minutes before we start losing members in mass
So just keep you on the ball here appreciate that chair shruggi
I will just last comment on this slide
While Russian seafood is removed from the u.s. Marketplace
And it's created a large void to be filled by Alaska seafood.
Our competitors in other countries have all identified the U.S. as an opportunity for growth
because there's no longer Russian seafood there. And so our competitors from Norway,
Chile, Iceland, and farmed whitefish from Southeast Asia have said, let's go to the US, too.
So we have competition. So this market is not just going to
be given to us. We have to fight for it as well.
So what do we know of the American consumer?
Well, we now that's, yes, they are price sensitive.
We saw that in 2022.
Seafood is inherently expensive, and so they're telling us,
well, calm down a little bit on the pricing.
However, the second claim that is most motivating
to the point of purchase for US consumers
when it comes to seafood is that wild caught claim.
As a music to our ears,
we've spent 40 years telling consumers
Fish and that's the fish they should be reaching for so it shows that our marketing is working because right we're 60% of the USC food
That means they're reaching four Alaska when they are making that purchase
And we know that because when you drill that information in this research down even further
When we use Alaska or the Alaska seafood logo on packaging consumers have told us they were 80% more likely to purchase that product
Even more so they've said 78% consumers said that they willing to pay more for that products as well
But, on the previous slide, I just said they're probably sensitive, right?
And then here they tell us that they are willing to pay more, so how much more are they willing
to paid for that product?
Well, our research shows that the price premium that we get for Alaska branded products on
average is about 15 percent more.
That's a 15% difference, and I'll talk about that in a later slide.
That comes back to our processors, the communities, or fishermen in the state.
So how do we talk Alaska seafood, how we reach consumers?
You'll find this in every single major publication, whether it's print or digital.
A lot of times we tell the Alaska story, just like our friends at ATIA do.
The Alaska Story is a great captivating way to get people to lean into Alaska seafood.
We tended to do this through trusted sources and trusted names, such as seeing the top
screen there with Martha Stewart and Marcus Amelson, with one of our favorite resident
Alaska fishermen, Hannah Heimbuck.
Our consumer PR and social media did a great job in 2025.
influencers continue to drive a lot of our social media impressions and engagement,
but if you look at that number and the far right there are earned media coverage,
still outweighs impressions. Over 7 billion impressions in 2025 alone just through earned
media. So with that pitching, that everyday storytelling is really important to capture
our viewership and our audiences to get them into the store for Alaska Seafood Products.
once we get into the store, what's the path to purchase? Well, as often as possible, we're trying
an omnichannel approach. This is an example from 2023, 2024, when we had to move a lot of sockeye salmon.
Costco is a great partner. Costco sells a LOT of Sockeye Salmon. I can't share the numbers
because it is confidential, but let's just say they sell a ton.
and actually tons. This is a great example of an omnichannel promotion where here we are touching
them in multiple different points before that consumer even gets to the aisle. We're accessing
them online on the Costco website, the COSCO connection magazine, on TVs. The first thing you
see when you walk into every business center as well as the in-house, in warehouse email catalog.
This also, when they get to The aisle, they don't have to go is it farmed or is
And it works time and time again.
So we've been really successful with sockeye salmon.
But like I said, Russia is no longer in the marketplace.
So, we have an opportunity to elevate other species.
And we're starting to do that with pink salmon,
and if you were to go to your local grocery store two years
ago and you just went into the canned seafood aisle,
you would have saw a majority of that canned pink
salmon just called out a specific pink
salmon or wild pink Salmon.
I guarantee you the majority of that will say Alaska Pink Salmon has to, because it's
coming from Alaska.
And so this gives us an opportunity to really elevate one of our lower value species and
bring more value back to it to two Alaskans.
So we've created our marketing teams, put together and created a package that our retail
and food service partners can use for Pink salmon and tell a better story around Pink
salmon, especially Alaska pink salmon.
We're just starting to see these these new assets roll out and I'm excited to
see how these continue to build value for pink salmon. But like I said, we need
time to do it, right? We have that that ban. We need that
ban in place. Lynn starts up here in a couple weeks. That means that your
favorite fast food chain is going to be carrying a crispy fried white fish
sandwich. Why is this important? Well, McDonald's alone sells a quarter of all
That's an impressive amount of lay-off dishes sold in during that time. I'll continue to just highlight McDonald's here
McDonalds has been a great partner
When we try to partner with these different programs we give them a little bit of dollars to get them in make sure they're spending
They're using the Alaska seafood logo calling on Alaska's seafood products
We are now on digital signage for McDonald nation wide which is
which is showing those customers throughout the year
that Alaska Seafood Products are seeing that touch point over and over
and we don't have to give them any more money to do that.
That was an initial spend and that's usually what we see with these partners.
You see that value, that strength in the Alaska seafood brand, we get them in
and then they'll continue to carry the alaska seafood
brand year after year in their promotions.
I'm going to switch gears a little bit and talk about the international market quickly.
The international market you saw the size of our program budget and earlier slide
It's important because still about 65 to 70 percent of the product by value still goes overseas
If you look at this slide the best way to interpret the map here green dots over as me as active marketing programs the red dots is where
Alaska seafood products go, but as I mean does not have active Marketing programs
South Korea is a big outlier here
South Korean is primarily a cold storage trans shipping
destination so a lot of seafood goes there but it just is held there in coal storage and then moved
on to further destinations such as Japan or to Europe. The best way to think about what species
are exported versus what state here in the U.S. as I like to look at as our high volume lower
such as Pollock, Gita salmon, a lot of pink salmon
tends to go overseas.
What stays here in the US is usually our lower volume,
higher value species, king salmon and king crab,
halibut for instance.
There's a few species that cross kind of both lines there,
such a sable fish and sockeye salmon.
There is enough volume and they kind
of strike that balance of value and volume.
Because our international funds have increased,
ASME's international portfolio has also increased.
We are now in over 55 different countries
with 10 different international marketing programs.
So we have contractors overseas who work on RB-Half
in those markets, they're in market experts
to do marketing on our behalf.
I'll share with you just a couple of international examples to get us through the slides here.
Here's one example from a few years ago with Family Mart.
If you're not familiar with family mart in Japan as a convenience store, they're similar
to 7-11.
I think an easy way to compare from maybe a US analogy would be if 711 is Starbucks,
there's 1 in every corner.
Family mart is more like Dunkin Donuts, there is 1 on every other corner
This promotion, in particular promotion with Family Mart in 2023, was specifically selling
Ikura and Tarako, which are salmon and Alaska Pollock, roe, Onigiri.
Onagiri is a rice ball.
You'll find them in every single convenience store in Japan.
They're delicious.
I highly recommend that's the first thing you buy if you ever go to Japan in this 25-day
over 3.5 million servings.
We had a video plane in the stores in
the same time that was seen over
3,8 million times and it generated
about $7 million in US sales.
We invested only $56,000 to generate those sales,
that's an incredible return on investments.
So good that we did
another promotion with Family Marches this last year.
And this promotion, we changed it a little bit.
We added more products.
There was seven Alaska seafood logo branded items in the store
with our digital signage.
We timed it with a Japan fishery agency's Good Fish Day.
I don't know why it's over four days,
but they called it Good fish day.
We were targeting evening shoppers.
So busy lives coming home after work or trying to find something
quick to eat going through the convenience store.
The numbers are still preliminary, but the preliminary numbers where we had
impressions of over 14.2 million times generated about 18 million dollars in
U.S. sales and sold a total of 14 million.
Unique seafood pro Alaska seafood products during this promotion 711 is a great or sorry 7 11 and family Marta great partners
We've done a really great job calling out the Alaska Seafood logo and both of those convenience stores
Family Mart is actually coming to Alaska this summer their
CEO actually wants to come to Alaskan because he's so bought into this promotional program and how successful it's been and actually means a lot
To us to have them investing so much into our state
And Mr. Woodrow love to see Alaska's seafood being marketed so well we are at about the time
I was hoping to stop I have I can go another five minutes before I had a very hard stop
Would you know? I know we've got at least one member with a question or two
Would do you like to blast through your last couple slides and take some questions or how do like you proceed with your five
Minutes that you've gotten I'm gonna take
30 seconds on one last slide and I'll take questions that work share. Thank you. Mr. Woodrow, please continue. All right last
Slide for you last year as me conducted an ROI study will make sure that our dollars are going as far as we say they are
The key points from that RO I study are that's one for every dollar we get from either the state of the industry return that into $1.82
as being works very closely with the industry and these returns would not be
possible if it wasn't for our partnership with industry. And so that's why when we
say we regenerate a $464 million return in 2023, why we want to take credit for
it all. We can't take it for it at all, but it is the partnership created with
the Industry that using the Alaska Seafood logo, calling it Alaska and being very
strategic where we put our efforts, we're able to generate more value back to the
dollar return back to Alaska in the industry really shows that our work is doing what we say it is
Wonderful. Thank you very much for that
Representative Byam, I know you had a question. Please thank you, co-chair Schraghi through the chair
Thank You for being here
Definitely good to see our products being marketed around the world
And in United States
I don't want to get too political, but one of the things that comes up that I get asked quite a bit
From my community members a big fishing community catch a can wrangle
They see these types of programs happening and then they see us putting the money in through ugf dollars
And I understand you have federal dollars coming in you
Have industry paid dollars going into this but then we from time to time add additional dollars and they
See those dollars go in and They feel
They're frustrated I guess in the sense that they See that there's these large
I was to say large commercial fishing boats that are doing fishing that is very controversial
right now in Alaska.
And then they're out there and they are small hand liners and power trawlers catching King
Salmon and other fish.
And they see that marketing going out for those big corporates, companies, and then
And so I get the question of why in the heck
are you guys funding them.
And I was hoping that maybe you could talk a little bit
about maybe that whole idea of, I just hope maybe
you can level that for me.
So I have a good response to my constituents
because I don't have good one.
Other than I think it's good for Alaska
that we're marketing our products.
Mr. Woodrow.
Through the chair, Representative Biden.
I know exactly what you're talking about.
I'm not blind.
I know that the controversy that we see in some of our commercial fisheries in the state
of Alaska, I'll say for one, you know, Azmi's job is to market and not to manage our fisheries,
right?
And so we aren't trying to get into that political debate.
Two though that our job as to mark at Alaska first and the brand is Alaska and consumers,
they aren�t nuanced enough to know how that fish was caught.
or they know where it was caught, not necessarily exactly where in the state of Alaska, but they
view Alaska seafood positively. I will say one of Asme's job is to make sure that consumers continue
and it's actually was the very first thing I showed on our mission is it continued to see
Alaska's seafood favorably and so we pay very close attention to how consumers view Alaskas seafood
holistically.
whether it was caught by a small boat, hand-trolling in Southeast Alaska or a large boat
trolling in the Bering Sea, our consumers view that the same. And we want to make sure that
they continue to see Alaska seafood the the. Secondly, or thirdly, I should say that we tell
the Alaska Seafood story through our species. We tell that story, through all the different
Our small boat fisheries are really, when I say that we have 19,000 fishermen,
11, 000 of those are residents. Those are our smallboat fisheries, right? So they're the backbone
of our industry. It's important that when we talk to consumers globally that they are the ones that
we put front and center, they were the one that matter most to our state. Thank you. Yes, thank
you, Mr. Woodrow. I really appreciate your patience today and for being with the committee,
thank you for the work that you do with ASME. With that,
This concludes our business for this meeting.
Our next House Finance Committee meeting is scheduled for today at 5.30pm.
At that meeting, we will hear public testimony on HB 284, the Governor's Omnibus Tax Bill.
Please note, for that reading, written testimony may be submitted to the committee at house.finance
at akaleg.gov.
That's house.finance at akaleg.gov.
We ask the public to keep their testimony to two minutes to ensure everyone has an opportunity to testify and of course longer testimony can be submitted through that email just provided.
With nothing else before the committee at this time, we are adjourned at 3.45 p.m. Thank you.