It’s no big fish story: Pennsylvania’s growing public pension obligations could soon hook anglers across the state.
Lawmakers are considering increasing fishing license and permit fees for the first time since 2005 as the state Fish and Boat Commission trolls for about $9.1 million in revenue to sustain core operations while paying for ballooning retirement and health care costs. Nearly $7.5 million alone is needed to pay for upcoming pension obligations, said John Arway, executive director of the commission.
Under a proposal authored by state Sen. Jim Brewster, D-Allegheny, the increases would apply to the 2017 license year. The annual resident license fee would rise from $21 to $26.25 and annual senior licenses would increase from $10 to $12.50, both 25 percent hikes.
Like the seemingly always rising school property taxes, the prospect of more expensive fishing licenses is a tangible reminder of Pennsylvania’s pension problem. The state, as of this spring, had piled up about $60 billion in public pension debt after shortchanging its annual contributions for years.
It also comes after Democratic Gov. Tom Wolf vetoed a Republican pension reform plan that shifted new hires from a defined benefit plan into a 401(k)-type plan. While savings would have been spread out over many years — and probably wouldn’t help current situations like the one facing the commission — reform advocates contend it would have set the state on a better course.
“What’s important is that we stop digging, so to speak, and change the system so that we don’t have to continue these increases into the future,” said Elizabeth Stelle, director of policy analysis with the Commonwealth Foundation, a free-market think tank based in Harrisburg.
For now, lawmakers and Wolf are discussing a second pension proposal, but bills are coming due.
Arway said his agency has scant options, largely because it receives no money from the state’s general fund. The agency has been sliding down a fiscal slope as costs escalate, funding remains level and license sales — curbed by past fee increases — remain down from a high set in 1990, he said.
“Right now, the fiscal cliff’s imminent. That’s why we’ve chosen to look at increasing fees for fishing,” Arway said, calling it a “painful” argument to make.
All but three categories of licenses would increase by 25 percent. A trout/salmon permit would cost $14, a 75 percent increase. A combination trout/salmon and Lake Erie permit would rise about 43 percent. And the senior lifetime license for residents 65 and older would double from $50 to $100, partly because an expanding portion of anglers are reaching retirement age.
Incremental increases would continue for five years thereafter. The annual resident license would cost $30.43 by 2022.
All told, Brewster expects his proposal to raise $7.8 million of the $9.1 million the commission needs. It’d be enough to cover pension costs, but not much more. Without it, the agency would have to entertain cuts to programs and services, Arway said.
Brewster does not like the idea of closing fish hatcheries and stopping the stocking of streams. Pensions are part of the expense of running an agency that preserves natural resources, he said.
“I think we’re on the right track here,” Brewster said. “And what my fear is, is if we cut, cut, cut or don’t react to the shortfall, what are we doing for future generations?”
The Fish and Boat Commission finds itself in the predicament largely because of its own business model. It operates on a “users pay-users benefit” system in which license fees comprise about 70 percent of its total budget. Even federal funding that helps fill out the budget is tied to the number of licenses Pennsylvania sells, Arway said.
Arway has lobbied for more diversified funding. The commission has had minor success obtaining revenue from a transportation funding law and the impact fee on the natural gas industry, he said, but those funds are earmarked for specific activities.
Pointing out that anglers and boaters spend $1.2 billion a year in Pennsylvania, Arway believes it would be reasonable for the commission to receive a chunk of the state’s sales tax revenue. It’s not unprecedented; Virginia allocates about $13 million in sales tax revenue annually to its Department of Gameland and Inland Fisheries and bases it on estimated expenditures of anglers, hunters and wildlife watchers.
Something similar here could help the commission invest in boating and fishing and attract more people to the pastimes, Arway said. Instead, it’s considering raising fees, which has been proven to drive people away. Fee increases usually result in an 8 to 10 percent loss in sales that do not come back, Arway said.
“We’ve got to break out of this business model where we just continue to keep relying upon the users to pay for the benefits they receive because of the importance of fishing and boating to the state’s economy,” Arway said.
The Pennsylvania Federation of Sportsmen’s Clubs is comprised of about 220 groups statewide and represents about 71,000 members, many of them anglers. It has supported past fee increases because members understand what it takes to run the commission, said John Kline, the federation’s director of government affairs.
Yet, while taking a diplomatic position, Kline acknowledged reaction could be mixed.
“Nobody likes paying more for anything,” he said, before offering a slight caveat. “When it comes to fishing licenses or hunting licenses, we know that we pay most of the way ourselves and pride ourselves in that.”
George Fuhrman, 68, has been fishing since he was about 10 and serves on the Trout Committee for the York Chapter of the Izaak Walton League of America, a conservation organization. He doesn’t mind that the fee increase would fund pensions.
That said, Fuhrman would rather see the sales tax used to fill the gap than have anglers foot the bill, he said. Fuhrman already has his lifetime license, so a fee increase won’t hurt him. But he said there are plenty of people who are struggling with home budgets.
“They’re trying to make this a specifically rich man’s sport — both hunting and fishing,” he said. “That’s not what this is all about.”
Ultimately, there’s a lunker of a pension bill coming due, and that means Arway and lawmakers will have some decisions to make about hiking license fees.
Brewster hasn’t formally introduced his proposal as a bill yet and public hearings are likely to follow, but he hopes to have the legislation in place by the end of September 2016.
“Frankly, I don’t like the idea,” Arway said, “but it’s the reality of things.”