Performance Details

Department of Revenue

Mission

The mission of the Department of Revenue is to collect, distribute and invest funds for public purposes. Alaska Constitution Article 9; AS 25.27, AS 37, AS 43

Core Services

  • Funds Collection
  • Funds Distribution
  • Funds Investment
  • Safety for Alaskans

Arrow GraphicResults

Core Services
A: Department Result  Details >
A1: Funds Collection  Details >
  • TARGET #1: Conduct five new compliance projects to identify non-filers.
  • TARGET #2: 90% of existing taxpayers file their tax returns and make tax payments timely.
  • TARGET #3: Increase child support collections by 1.0%, to include Permanent Fund Dividend collections.
  • TARGET #4: 1,000 hour increase in audit hours over prior year.
A2: Funds Distribution  Details >
  • TARGET #1: Increase disbursements of child support payments by 0.5%.
  • TARGET #2: Maintain or reduce administrative costs from year to year.
A3: Funds Investment  Details >
  • TARGET #1: For the funds under the fiduciary responsibility of the Commissioner of Revenue, exceed the applicable 1-year target returns.
  • TARGET #3: Formal visit, bond issue update, or updated document template sent or presented to ratings agencies at least four times per year.
  • TARGET #4: 100% of new financings will result in savings.
A4: Safety for Alaskans  Details >
  • TARGET #1: 90% of all complaints received are resolved to the satisfaction of the resident or complainant.

Performance Detail


A: Result - Department Result

A1: Core Service - Funds Collection
    
Target #1: Conduct five new compliance projects to identify non-filers.


Compliance Projects Conducted
Fiscal Year # of Compliance Projects # New Taypayers
FY 2017
67
27
FY 2016
27
15
FY 2015
12
18
FY 2014
15
11
FY 2013
8
62
FY 2012
24
109
FY 2011
68
98
FY 2010
17
87
FY 2009
23
68

Analysis of results and challenges: The Tax Division encourages voluntary compliance as the most effective tool for collecting tax revenues. An important aspect of voluntary compliance is for taxpayers to believe that they are paying about the same amount in taxes as other similarly situated taxpayers. Seeking out and finding new taxpayers and bringing them into compliance assists the Department of Revenue both in long-term voluntary compliance as well as bringing in the revenues from the new taxpayers. The Division does not believe there are any major oil and gas taxpayers not filing. Therefore, the Division focuses its compliance efforts on other tax types. This target and measure does not include federal or multi-state compliance programs in which the Division currently participates.

Compliance projects include analyzing databases of other states, the federal government, and local agencies to ensure that a person engaged in a taxable activity is filing required tax returns. In the past the Division has also conducted taxpayer outreach and education through attendance at industry meetings and conferences.

    
Target #2: 90% of existing taxpayers file their tax returns and make tax payments timely.

Methodology: This measure was added in FY2009.

Taxpayers Filing and Paying Taxes Timely
Fiscal Year % of Timely Filers
FY 2017
87.4%
FY 2016
89.7%
FY 2015
89.0%
FY 2014
98.5%
FY 2013
98.5%
FY 2012
96.1%
FY 2011
98.5%
FY 2010
95.0%
FY 2009
96.1%

Analysis of results and challenges: The Tax Division recently completed its final rollout of its Tax Revenue Management System. The new system replaced many outdated legacy systems and allows us to get more accurate information from tax returns. While the above graph and table report a decrease in timely filing and paying of tax returns beginning in FY2015 (the year of our first rollout), we believe the higher numbers in earlier years were not correct, but a flaw in our previous system reports. We’ve checked with other states and they have told us that their timely filing rates are below 90 percent (some are far below). So, we feel the new system is giving us more accurate information. It should be noted that certain assumptions had to be made to produce the number provided. For example, only returns and payments that have been received are considered in the calculation. There may be returns and payments that will be late but have not yet been received. One of the primary functions of the Tax Division is to encourage voluntary compliance by all taxpayers across all tax programs. This is achieved in a variety of ways, i.e. taxpayer education and outreach programs, compliance activities where the Division actively looks for non-filers, and collection activities. Taxpayers are more apt to voluntarily comply if they believe that everyone else is paying their fair share and the Division makes it relatively easy to file returns and pay taxes. As such, the most effective way to measure performance is to look at the percentage of known taxpayers who timely file their returns and pay their taxes.

Our new revenue management system has a public facing component which allows taxpayers to file and make payments online. The Division has had great success with this system and believes it is a factor in the performance reported.
    
Target #3: Increase child support collections by 1.0%, to include Permanent Fund Dividend collections.


Percent Change in Total Child Support Collections for a Fiscal Year
Fiscal Year % Change
FY 2017
-10.1%
FY 2016
0.10%
FY 2015
4.2%
FY 2014
0.22%
FY 2013
-2.20%

Analysis of results and challenges: FY2017 collections including Permanent Fund Dividends (PFDs) decreased by 10.1% over FY2016.

The division did not meet last year’s target of a 1% increase in collections. The primary reason for this is the decrease in the PFD check amount as well as the increase in unemployment as the bulk of our collections comes from PFD garnishment and wage assignment. The goal for the next fiscal year remains a 1% increase.

    
Target #4: 1,000 hour increase in audit hours over prior year.


Change in Audit Hours over Prior Year
Fiscal Year # of Hours
FY 2017
-2,670
FY 2016
4,168
FY 2015
-1,102
FY 2014
-11,582
FY 2013
-4,957
FY 2012
1,006
FY 2011
-3,202
FY 2010
3,742
FY 2009
8,102

Analysis of results and challenges: Although voluntary compliance remains our best tool for effective tax collection, that voluntary effort is enhanced by an audit presence, and therefore, the Division needs to increase its audit numbers.

The change in audit hours over the prior year decreased by 2,670 hours in FY 2017. This can partially be explained by the fact that there have been significant changes in the Oil and Gas Production Tax type which has required changes to our system. Our auditors participate in the development and testing of those changes and the changes require a significant time commitment. Also, federal tax code changes at the federal level required our Corporate Income Tax auditors to send time making changes to the system as well. The Production Audit and Corporate Income Audit groups remain current on all oil and gas audits.


A2: Core Service - Funds Distribution
    
Target #1: Increase disbursements of child support payments by 0.5%.


Disbursements of Child Support Payments
Fiscal Year % of Change
FY 2017
-8.45%
FY 2016
-0.51%
FY 2015
4.98%
FY 2014
-0.04%
FY 2013
-4.20%

Analysis of results and challenges: This measure has a direct correlation to the amount of collections received in the fiscal year: when collections decrease, disbursements will also decrease.

Overall collections decreased by 10% while disbursements decreased by 8.45%

The division continues to focus on gaining efficiencies to meet our target increase of 0.5% in child support disbursements.

    
Target #2: Maintain or reduce administrative costs from year to year.

Methodology: Calendar/dividend year is used for Permanent Fund dividend (PFD) application and payment statistics. Appropriations are based on state fiscal year and become effective on July 1 of the dividend year shown.
*Total PFD appropriation includes funding for fiscal notes, prior year supplementals, and new capital appropriations.
**Number of applications received by the Permanent fund Dividend Division at time of dividend calculation.


Estimated Cost per Dividend Paid
Fiscal Year Dividend Year Total PFD Appropriation* #Applications Received** Estimated # PFD's Paid Estimated Cost Per PFD
FY 2017
2016
$8,340,100
675,531
643,678
$12.96
FY 2016
2015
$8,521,400
676,379
644,511
$13.22
FY 2015
2014
$8,245,500
677,114
641,489
$12.85
FY 2014
2013
$8,290,900
672,951
640,249
$12.95
FY 2013
2012
$8,221,000
677,733
646,805
$12.71

Analysis of results and challenges: The Division was successful in operating the PFD program while also seeing a decrease in the cost per dividend. Although the overall number of applicants slightly fluctuates, cost per dividend has minimally changed over the last five years due to division efficiency improvements and process automation.
    
Target #3: Increase Senior Housing units by 5%


Senior Housing Units
Fiscal Year New Senior Units Total Senior Units % Change
FY 2017
92
1,376
7.17%
FY 2016
47
1,284
3.80%
FY 2015
95
1,237
8.32%
FY 2014
64
1,142
5.93%
FY 2013
94
1,078
9.55%
FY 2012
20
984
2.07%
FY 2011
58
964
6.40%
FY 2010
30
906
3.42%
FY 2009
45
876
5.42%
FY 2008
53
831
6.81%
FY 2007
48
778
6.58%
FY 2006
42
730
6.10%
FY 2005
25
688
3.77%
FY 2004
64
663
10.68%
FY 2003
144
599
31.65%
FY 2002
88
455
23.98%
FY 2001
24
367
7.00%

Analysis of results and challenges: Historically, $3M or more in Senior Citizens’ Housing Development Fund (SCHDF) grants have been allocated each year to rental developments serving seniors. In FY 2016, the SCHDF program was eliminated from the capital budget. The FY 2016 units were delivered by allocating the remaining $900k in SCHDF funding from the previous year. In FY 2017, the SCHDF funding was partially restored in the final budget. As a result of the restored funding, the new senior housing stock reported in this section is anticipated to continue growing.

Although AHFC provides mortgage financing for assisted living facilities, those developments report beds rather than units; consequently, AHFC mortgages to assisted living properties are excluded from these “unit” data. The gap between the need and what is developed grows each year. Senior and special needs housing remains a high priority for the Corporation.
    
Target #4: Increase Multi-Family units by 3%


Multi-Family Units
Year New Units Total Units % Change
2017
217
16,796
1.31%
2016
167
16,579
1.02%
2015
199
16,412
1.22%
2014
305
16,213
1.91%
2013
403
15,908
2.59%
2012
537
15,505
3.58%
2011
262
14,968
1.78%
2010
94
14,706
0.64%
2009
658
14,612
4.72%
2008
547
13,954
4.08%
2007
437
13,407
3.37%
2006
839
12,970
6.92%
2005
1,067
12,131
9.64%
2004
1,491
11,064
15.58%
2003
938
9,573
10.99%
2002
748
8,625
9.36%
2001
2,897
7,887
58.06%
2000
1,438
4,990
40.00%

Analysis of results and challenges: Multi-family housing activity is subject to interest rate fluctuations, local economic conditions and other unpredictable market influences. Affordable rental housing remains in demand and benefits markets by freeing proportional household income to be spent in the community. However, new construction faces marginal feasibility due to the spread of achievable rents and rents needed to supporting development costs. Unit production will remain a challenge due to high development costs, flat funding and reductions in match funding available for AHFC funded projects. Additional uncertainty due to potential tax reform has also created volatility in the market.

A3: Core Service - Funds Investment
    
Target #1: For the funds under the fiduciary responsibility of the Commissioner of Revenue, exceed the applicable 1-year target returns.

Methodology: FY2017 one-year return data is for the period 7/1/2016 through 6/30/2017.

One-year Return Data for Funds Managed by the Treasury Division
Fiscal Year Fund Actual Return Target Return
FY 2017
Gen Fund/Other Non-segregated Fu
.56%
.31%
FY 2017
Public School Trust Fund
10.13%
10.01%
FY 2017
Int'l Airports Revenue Fund
1.91%
1.36%
FY 2017
Const Budg Resv Fund-Main Acc
1.83%
1.36%
FY 2017
Retirement Hlth Ins Fund-LongTer
6.79%
6.49%
FY 2017
Retirement Hlth Ins Fund- Maj Me
.88%
.49%
FY 2017
Power Cost Equalization Fund
12.21%
12.22%
FY 2017
Illinois Creek Reclamation Fund
12.22%
12.22%
FY 2017
Alaska Higher Education Fund
12.24%
12.22%

Analysis of results and challenges: A combination of investments that is expected to produce the highest investment return for a given amount of risk is known as a "point on the efficient frontier." Each fiduciary for a fund reviews points on the efficient frontier and selects the combination of investments consistent with their appetite for risk and return of the fund. This selection is known as the target asset allocation. Target returns assume the total rate of return of passively managed indexes invested in the same proportions as the target asset allocation. A fund’s investment return will differ from its target return if its asset allocation differs from the target asset allocation or if the returns of the underlying investments differ from those of the passively managed indexes.
    
Target #2: A long-term 5% real rate of return


Analysis of results and challenges: Analysis of results and challenges: The Alaska Permanent Fund’s long-term real rate of return for the period FY2008– FY2017 was 3.3 percent. This performance period includes the challenging markets of 2008 – 2009. The Fund's annualized real return for 33.5 years, ended June 30, 2017, was 8.9 percent.

The Board of Trustees has set an investment goal of a 5 percent real rate of return over time. The Board crafts an asset allocation that is expected to provide this return within an acceptable level of risk.

The Board of Trustees strategically allocates the Fund's investments among stocks, bonds, real estate, and alternative investments. Different types of assets are influenced differently by factors such as the economic cycle, interest rates, inflation and fiscal policy. Creating a mix of asset types whose returns move out of sync with one another moderates the Fund’s total volatility and increases the possibility of achieving a positive return.

For fiscal year 2017 the Corporation ended the year with a value of $59.8 billion in assets under management, an increase of $7.0 billion over the prior fiscal year-end. This is comprised of $47.0 billion in the principal of the Fund and $12.8 billion in the Earnings Reserve Account.


    
Target #3: Formal visit, bond issue update, or updated document template sent or presented to ratings agencies at least four times per year.


Updates Provided to Ratings Agencies
Fiscal Year # of Updates
FY 2017
7
FY 2016
16
FY 2015
11
FY 2014
5
FY 2013
4
FY 2012
4
FY 2011
4
FY 2010
5
FY 2009
4
FY 2008
4
    
Target #4: 100% of new financings will result in savings.


New Financings That Resulted in Savings
Fiscal Year Percent Aggregated Savings
FY 2017
100%
$41.2 million
FY 2016
100%
$75.3 million
FY 2015
100%
$25 million
FY 2014
100%
$12.7 million
FY 2013
100%
$19.6 million
FY 2012
100%
$17.2 million
FY 2011
100%
$13.6 million
FY 2010
100%
$9.6 million

Analysis of results and challenges: In each fiscal year shown, all communities that borrowed funds through the Alaska Municipal Bond Bank Authority are projected to be paying less debt service (realized savings) than they otherwise might have using other means of financing their project.

A4: Core Service - Safety for Alaskans
    
Target #1: 90% of all complaints received are resolved to the satisfaction of the resident or complainant.


Complaints Resolved to Satisfaction or Partial Satisfaction of Complainant
Fiscal Year Complaints Received % Resolved
FFY 2016
662
95%
FFY 2015
880
96%
FFY 2014
1150
95%

Analysis of results and challenges: In FFY 2016, this target was met. The Long Term Care (LTC) ombudsmen diligently work to ensure each resident living in a long term care facility is involved in the resolution of their complaints.

 

Current as of November 28, 2017