Judge axes Dillingham fish tax annexation
In an order issued March 27, Dillingham Superior Court Judge Patricia Douglass overturned the City of Dillingham's 2012 annexation of 396 square miles of the Nushagak Bay. That annexation, ratified after a contentious polling of Dillingham voters, allowed the city to impose a 2.5 percent tax on the commercially caught fish in those waters.
The judge's order pertains to an appeal filed by the Native Village of Ekuk against the Local Boundary Commission's approval of the annexation petition. The appeal was filed in February 2012, two months after the Commission approved the petition, and two months before Dillingham voters ratified it.
"My clients are pleased, this is exactly what we wanted," said attorney James L. Baldwin of Juneau, who represented the Native Village of Ekuk. Baldwin said his clients had adopted a role arguing on behalf of interested parties in Koliganek, New Stuyahok, Ekwok, Clarks Point, and Manokotak.
"First of all," said Baldwin, "the judge did an excellent job reviewing an extensive record and applying the facts in this case. The simple takeaway here is that the decision approving the annexation of the Nushagak Bay into the City of Dillingham limits has been vacated."
The appellants argued, and the judge held, that the Local Boundary Commission "abused its discretion in allowing the petition to proceed by local action, rather than legislative review."
"The local action method did not afford people of the region any kind of say in it," said Baldwin. "That method created a situation where only the citizens of Dillingham were allowed to vote for the annexation."
The legislative review method of annexing territory does not require a vote. Instead, after a petition is filed with the Local Boundary Commission, a series of hearings are held within the territories before the Commission can approve it. If approved, the Commission must present the petition to the legislature. Then the legislature must vote to disapprove the petition for it not to become final.
Some critics call this "forced annexation" because the public does not get a chance to weigh in at the polls.
Though the Commission has the authority to choose which of the two methods to use, Judge Douglass held that local action method clearly violated the due process rights of those in the Nushagak River villages other than Dillingham.
"The people whom the annexation would affect most seriously had inadequate opportunities for public comment, yet were also unable to vote," Douglass wrote. Those in the outlying villages, she held, were not able to participate in the drafting or preparation of the petition prior to its filing with the Commission, nor could they vote in the April 2012 election.
Judge Douglass remanded the Commission to process the petition by legislative review.
Where then do the matters of annexation and the Nushagak District raw fish tax go from here?
"That's a good question," said Baldwin. "It's kind of out of our hands at this point. The city and the state will have to decide whether to accept the decision or appeal it."
Dillingham city manager Rose Loerra said Monday that the city was only beginning to review the judge's order. As to the future of the raw fish tax, Loerra was not willing to speculate.
"We're nowhere near making those sort of determinations," she said. "This will all need to be carefully considered by our lawyers and the city council."
Still, the judge's order is being received as good news by many who opposed the annexation and the fish tax. Dillingham voters ratified the petition by a narrow 51 vote margin (352 yes to 301 no) in April 2012. For those who lost that vote, the wounds are still fresh.
"We have been against this from the beginning," said Tonya O'Connor, a permit holder whose family commercially set net fishes at Ekuk Beach. "We feel this is an income tax that violates our Alaska constitutional rights."
Some fishermen have complained about the added burden of a direct tax against their small businesses when profit margins, especially for those just getting started, are often tight. O'Connor said Ekuk fishermen cut back on hiring crew and scaled back the percentage paid to crew in lieu of the raw fish tax, which has been collected for two fishing seasons.
"The tax is a burden on fishing families, and the city hasn't given us any services for it. We want our money back," she said.